Correlation Between Industria and Amper SA

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

By analyzing existing cross correlation between Industria de Diseno and Amper SA, you can compare the effects of market volatilities on Industria and Amper SA 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 Industria with a short position of Amper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Amper SA.

Diversification Opportunities for Industria and Amper SA

0.05

Correlation Coefficient

Industria  Amper SA

Significant diversification

The 3 months correlation between Industria and Amper is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Industria 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 Industria de Diseno are associated (or correlated) with Amper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amper SA has no effect on the direction of Industria i.e., Industria and Amper SA go up and down completely randomly.

Pair Corralation between Industria and Amper SA

Assuming the 90 days trading horizon Industria is expected to generate 25.74 times less return on investment than Amper SA. But when comparing it to its historical volatility, Industria de Diseno is 3.46 times less risky than Amper SA. It trades about 0.02 of its potential returns per unit of risk. Amper SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Amper SA on December 3, 2024 and sell it today you would earn a total of  2.00  from holding Amper SA or generate 16.67% return on investment over 90 days.

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

Industria de Diseno  vs.  Amper SA

Industria de Diseno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Industria de Diseno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Industria is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amper SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amper SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Amper SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industria and Amper SA

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

The idea behind Industria de Diseno and Amper SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.