Correlation Between FIREWEED METALS and AMADEUS IT

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

By analyzing existing cross correlation between FIREWEED METALS P and AMADEUS IT HOLD, you can compare the effects of market volatilities on FIREWEED METALS and AMADEUS IT 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 FIREWEED METALS with a short position of AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and AMADEUS IT.

Diversification Opportunities for FIREWEED METALS and AMADEUS IT

0.37

Correlation Coefficient

FIREWEED METALS  AMADEUS IT

Weak diversification

The 3 months correlation between FIREWEED and AMADEUS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P and AMADEUS IT HOLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT HOLD and FIREWEED METALS 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 FIREWEED METALS P are associated (or correlated) with AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT HOLD has no effect on the direction of FIREWEED METALS i.e., FIREWEED METALS and AMADEUS IT go up and down completely randomly.

Pair Corralation between FIREWEED METALS and AMADEUS IT

Assuming the 90 days horizon FIREWEED METALS is expected to generate 2.06 times less return on investment than AMADEUS IT. In addition to that, FIREWEED METALS is 2.44 times more volatile than AMADEUS IT HOLD. It trades about 0.01 of its total potential returns per unit of risk. AMADEUS IT HOLD is currently generating about 0.03 per unit of volatility. If you would invest  6,650  in AMADEUS IT HOLD on October 25, 2024 and sell it today you would earn a total of  102.00  from holding AMADEUS IT HOLD or generate 1.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

FIREWEED METALS P  vs.  AMADEUS IT HOLD

FIREWEED METALS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIREWEED METALS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FIREWEED METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AMADEUS IT HOLD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMADEUS IT HOLD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AMADEUS IT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FIREWEED METALS and AMADEUS IT

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

The idea behind FIREWEED METALS P and AMADEUS IT HOLD 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.