Correlation Between Naturhouse Health and Amper SA

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

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

Diversification Opportunities for Naturhouse Health and Amper SA

0.49

Correlation Coefficient

Naturhouse Health  Amper SA

Very weak diversification

The 3 months correlation between Naturhouse and Amper is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Naturhouse Health 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 Naturhouse Health SA 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 Naturhouse Health i.e., Naturhouse Health and Amper SA go up and down completely randomly.

Pair Corralation between Naturhouse Health and Amper SA

Assuming the 90 days trading horizon Naturhouse Health is expected to generate 6.44 times less return on investment than Amper SA. But when comparing it to its historical volatility, Naturhouse Health SA is 3.65 times less risky than Amper SA. It trades about 0.07 of its potential returns per unit of risk. Amper SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Amper SA on December 30, 2024 and sell it today you would earn a total of  4.00  from holding Amper SA or generate 36.36% return on investment over 90 days.

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

Naturhouse Health SA  vs.  Amper SA

Naturhouse Health

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Naturhouse Health SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Naturhouse Health 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

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 unsteady basic indicators, Amper SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Naturhouse Health and Amper SA

The main advantage of trading using opposite Naturhouse Health and Amper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health 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 Naturhouse Health SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.