Correlation Between Information and Ama Marine

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

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

Diversification Opportunities for Information and Ama Marine

0.22

Correlation Coefficient

Information  Ama Marine

Modest diversification

The 3 months correlation between Information and Ama is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication and Ama Marine Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ama Marine Public and Information 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 Information and Communication are associated (or correlated) with Ama Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ama Marine Public has no effect on the direction of Information i.e., Information and Ama Marine go up and down completely randomly.

Pair Corralation between Information and Ama Marine

Assuming the 90 days trading horizon Information and Communication is expected to generate 1.91 times more return on investment than Ama Marine. However, Information is 1.91 times more volatile than Ama Marine Public. It trades about -0.02 of its potential returns per unit of risk. Ama Marine Public is currently generating about -0.13 per unit of risk. If you would invest  225.00  in Information and Communication on September 18, 2024 and sell it today you would lose (9.00) from holding Information and Communication or give up 4.0% of portfolio value over 90 days.

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

Information and Communication  vs.  Ama Marine Public

Information and Comm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Information and Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Information is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Ama Marine Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ama Marine Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Information and Ama Marine

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

The idea behind Information and Communication and Ama Marine 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.