Correlation Between Getty Copper and Ambari Brands

Can any of the company-specific risk be diversified away by investing in both Getty Copper and Ambari Brands at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Getty Copper and Ambari Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Copper and Ambari Brands, you can compare the effects of market volatilities on Getty Copper and Ambari Brands and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Getty Copper with a short position of Ambari Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Copper and Ambari Brands.

Diversification Opportunities for Getty Copper and Ambari Brands

0.0

Correlation Coefficient

Getty Copper  Ambari Brands

Pay attention - limited upside

The 3 months correlation between Getty and Ambari is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Getty Copper and Ambari Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambari Brands and Getty Copper is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Getty Copper are associated (or correlated) with Ambari Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambari Brands has no effect on the direction of Getty Copper i.e., Getty Copper and Ambari Brands go up and down completely randomly.

Pair Corralation between Getty Copper and Ambari Brands

Assuming the 90 days horizon Getty Copper is expected to generate 6.31 times less return on investment than Ambari Brands. But when comparing it to its historical volatility, Getty Copper is 3.83 times less risky than Ambari Brands. It trades about 0.04 of its potential returns per unit of risk. Ambari Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Ambari Brands on October 11, 2024 and sell it today you would lose (7.50) from holding Ambari Brands or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.74%
Values	Daily Returns

Getty Copper  vs.  Ambari Brands

Getty Copper

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ambari Brands

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ambari Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile fundamental drivers, Ambari Brands reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Getty Copper and Ambari Brands

The main advantage of trading using opposite Getty Copper and Ambari Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Copper position performs unexpectedly, Ambari Brands can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ambari Brands will offset losses from the drop in Ambari Brands' long position.

The idea behind Getty Copper and Ambari Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.