Correlation Between Mix Telemats and Amplitude

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

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

Diversification Opportunities for Mix Telemats and Amplitude

-0.84

Correlation Coefficient

Mix Telemats  Amplitude

Pay attention - limited upside

The 3 months correlation between Mix and Amplitude is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mix Telemats and Amplitude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplitude and Mix Telemats 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 Mix Telemats are associated (or correlated) with Amplitude. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplitude has no effect on the direction of Mix Telemats i.e., Mix Telemats and Amplitude go up and down completely randomly.

Pair Corralation between Mix Telemats and Amplitude

Given the investment horizon of 90 days Mix Telemats is expected to under-perform the Amplitude. But the stock apears to be less risky and, when comparing its historical volatility, Mix Telemats is 1.2 times less risky than Amplitude. The stock trades about -0.08 of its potential returns per unit of risk. The Amplitude is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,501  in Amplitude on October 23, 2024 and sell it today you would lose (376.00) from holding Amplitude or give up 25.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	24.24%
Values	Daily Returns

Mix Telemats  vs.  Amplitude

Mix Telemats

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mix Telemats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mix Telemats is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Amplitude

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amplitude are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Amplitude disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mix Telemats and Amplitude

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

The idea behind Mix Telemats and Amplitude 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.