Correlation Between Guerrilla and Ams AG

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

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

Diversification Opportunities for Guerrilla and Ams AG

0.43

Correlation Coefficient

Guerrilla  Ams AG

Very weak diversification

The 3 months correlation between Guerrilla and Ams is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Guerrilla RF and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG and Guerrilla 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 Guerrilla RF are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ams AG has no effect on the direction of Guerrilla i.e., Guerrilla and Ams AG go up and down completely randomly.

Pair Corralation between Guerrilla and Ams AG

Given the investment horizon of 90 days Guerrilla RF is expected to generate 2.06 times more return on investment than Ams AG. However, Guerrilla is 2.06 times more volatile than ams AG. It trades about 0.22 of its potential returns per unit of risk. ams AG is currently generating about 0.01 per unit of risk. If you would invest  110.00  in Guerrilla RF on September 27, 2024 and sell it today you would earn a total of  45.00  from holding Guerrilla RF or generate 40.91% return on investment over 90 days.

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

Guerrilla RF  vs.  ams AG

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ams AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ams AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ams AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guerrilla and Ams AG

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

The idea behind Guerrilla RF and ams AG 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.