Correlation Between Overseas Commerce and Amot Investments

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

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

Diversification Opportunities for Overseas Commerce and Amot Investments

-0.35

Correlation Coefficient

Overseas Commerce  Amot Investments

Very good diversification

The 3 months correlation between Overseas and Amot is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Overseas Commerce and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments and Overseas Commerce 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 Overseas Commerce are associated (or correlated) with Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Overseas Commerce i.e., Overseas Commerce and Amot Investments go up and down completely randomly.

Pair Corralation between Overseas Commerce and Amot Investments

Assuming the 90 days trading horizon Overseas Commerce is expected to generate 0.91 times more return on investment than Amot Investments. However, Overseas Commerce is 1.09 times less risky than Amot Investments. It trades about 0.16 of its potential returns per unit of risk. Amot Investments is currently generating about -0.12 per unit of risk. If you would invest  39,670  in Overseas Commerce on December 30, 2024 and sell it today you would earn a total of  4,690  from holding Overseas Commerce or generate 11.82% return on investment over 90 days.

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

Overseas Commerce  vs.  Amot Investments

Overseas Commerce

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Overseas Commerce are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Overseas Commerce sustained solid returns over the last few months and may actually be approaching a breakup point.

Amot Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amot Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Overseas Commerce and Amot Investments

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

The idea behind Overseas Commerce and Amot Investments 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.