Correlation Between AMTD Digital and Bill

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

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

Diversification Opportunities for AMTD Digital and Bill

-0.74

Correlation Coefficient

AMTD Digital  Bill

Pay attention - limited upside

The 3 months correlation between AMTD and Bill is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and AMTD Digital 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 AMTD Digital are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of AMTD Digital i.e., AMTD Digital and Bill go up and down completely randomly.

Pair Corralation between AMTD Digital and Bill

Considering the 90-day investment horizon AMTD Digital is expected to generate 0.92 times more return on investment than Bill. However, AMTD Digital is 1.09 times less risky than Bill. It trades about -0.01 of its potential returns per unit of risk. Bill Com Holdings is currently generating about -0.13 per unit of risk. If you would invest  295.00  in AMTD Digital on October 6, 2024 and sell it today you would lose (3.00) from holding AMTD Digital or give up 1.02% of portfolio value over 90 days.

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

AMTD Digital  vs.  Bill Com Holdings

AMTD Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMTD Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMTD Digital and Bill

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

The idea behind AMTD Digital and Bill Com Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..