Correlation Between Duro Felguera and Amper SA

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

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

Diversification Opportunities for Duro Felguera and Amper SA

0.62

Correlation Coefficient

Duro Felguera  Amper SA

Poor diversification

The 3 months correlation between Duro and Amper is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Duro Felguera and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Duro Felguera 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 Duro Felguera 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 Duro Felguera i.e., Duro Felguera and Amper SA go up and down completely randomly.

Pair Corralation between Duro Felguera and Amper SA

Assuming the 90 days trading horizon Duro Felguera is expected to generate 1.67 times more return on investment than Amper SA. However, Duro Felguera is 1.67 times more volatile than Amper SA. It trades about 0.1 of its potential returns per unit of risk. Amper SA is currently generating about 0.13 per unit of risk. If you would invest  23.00  in Duro Felguera on December 29, 2024 and sell it today you would earn a total of  8.00  from holding Duro Felguera or generate 34.78% return on investment over 90 days.

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

Duro Felguera  vs.  Amper SA

Duro Felguera

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Duro Felguera are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Duro Felguera exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amper SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amper SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Amper SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duro Felguera and Amper SA

The main advantage of trading using opposite Duro Felguera and Amper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duro Felguera 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 Duro Felguera 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.