Correlation Between Homerun Resources and Amotiv

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

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

Diversification Opportunities for Homerun Resources and Amotiv

-0.28

Correlation Coefficient

Homerun Resources  Amotiv

Very good diversification

The 3 months correlation between Homerun and Amotiv is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Homerun Resources and Amotiv Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amotiv Limited and Homerun Resources 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 Homerun Resources are associated (or correlated) with Amotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amotiv Limited has no effect on the direction of Homerun Resources i.e., Homerun Resources and Amotiv go up and down completely randomly.

Pair Corralation between Homerun Resources and Amotiv

Assuming the 90 days horizon Homerun Resources is expected to under-perform the Amotiv. In addition to that, Homerun Resources is 2.67 times more volatile than Amotiv Limited. It trades about -0.02 of its total potential returns per unit of risk. Amotiv Limited is currently generating about 0.02 per unit of volatility. If you would invest  555.00  in Amotiv Limited on October 25, 2024 and sell it today you would earn a total of  6.00  from holding Amotiv Limited or generate 1.08% return on investment over 90 days.

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

Homerun Resources  vs.  Amotiv Limited

Homerun Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Homerun Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Amotiv Limited

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amotiv Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amotiv is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Homerun Resources and Amotiv

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

The idea behind Homerun Resources and Amotiv Limited 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.