Correlation Between Golden Ventures and Amata Public

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

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

Diversification Opportunities for Golden Ventures and Amata Public

-0.12

Correlation Coefficient

Golden Ventures  Amata Public

Good diversification

The 3 months correlation between Golden and Amata is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold and Amata Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Public and Golden Ventures 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 Golden Ventures Leasehold are associated (or correlated) with Amata Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Public has no effect on the direction of Golden Ventures i.e., Golden Ventures and Amata Public go up and down completely randomly.

Pair Corralation between Golden Ventures and Amata Public

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to under-perform the Amata Public. But the stock apears to be less risky and, when comparing its historical volatility, Golden Ventures Leasehold is 2.58 times less risky than Amata Public. The stock trades about -0.01 of its potential returns per unit of risk. The Amata Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,270  in Amata Public on October 25, 2024 and sell it today you would earn a total of  405.00  from holding Amata Public or generate 17.84% return on investment over 90 days.

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

Golden Ventures Leasehold  vs.  Amata Public

Golden Ventures Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ventures Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Golden Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amata Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amata Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amata Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Ventures and Amata Public

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

The idea behind Golden Ventures Leasehold and Amata Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.