Correlation Between Hewlett Packard and Amprius Technologies

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

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

Diversification Opportunities for Hewlett Packard and Amprius Technologies

0.59

Correlation Coefficient

Hewlett Packard  Amprius Technologies

Very weak diversification

The 3 months correlation between Hewlett and Amprius is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Enterprise and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Hewlett Packard 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 Hewlett Packard Enterprise are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Hewlett Packard i.e., Hewlett Packard and Amprius Technologies go up and down completely randomly.

Pair Corralation between Hewlett Packard and Amprius Technologies

Assuming the 90 days trading horizon Hewlett Packard is expected to generate 54.98 times less return on investment than Amprius Technologies. But when comparing it to its historical volatility, Hewlett Packard Enterprise is 6.22 times less risky than Amprius Technologies. It trades about 0.03 of its potential returns per unit of risk. Amprius Technologies is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  195.00  in Amprius Technologies on October 11, 2024 and sell it today you would earn a total of  108.00  from holding Amprius Technologies or generate 55.38% return on investment over 90 days.

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

Hewlett Packard Enterprise  vs.  Amprius Technologies

Hewlett Packard Ente

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Hewlett Packard is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Amprius Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hewlett Packard and Amprius Technologies

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

The idea behind Hewlett Packard Enterprise and Amprius Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.