Correlation Between Genetic Technologies and AMP

Can any of the company-specific risk be diversified away by investing in both Genetic Technologies and AMP 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 Genetic Technologies and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genetic Technologies and AMP, you can compare the effects of market volatilities on Genetic Technologies and AMP 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 Genetic Technologies with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genetic Technologies and AMP.

Diversification Opportunities for Genetic Technologies and AMP

-0.51

Correlation Coefficient

Genetic Technologies  AMP

Excellent diversification

The 3 months correlation between Genetic and AMP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Genetic Technologies and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Genetic Technologies 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 Genetic Technologies are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Genetic Technologies i.e., Genetic Technologies and AMP go up and down completely randomly.

Pair Corralation between Genetic Technologies and AMP

Assuming the 90 days trading horizon Genetic Technologies is expected to under-perform the AMP. But the stock apears to be less risky and, when comparing its historical volatility, Genetic Technologies is 1.36 times less risky than AMP. The stock trades about -0.05 of its potential returns per unit of risk. The AMP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  130.00  in AMP on September 21, 2024 and sell it today you would earn a total of  30.00  from holding AMP or generate 23.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Genetic Technologies  vs.  AMP

Genetic Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genetic Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Genetic Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

AMP

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AMP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genetic Technologies and AMP

The main advantage of trading using opposite Genetic Technologies and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genetic Technologies position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.

The idea behind Genetic Technologies and AMP 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.