Correlation Between Perpetual Credit and AMP

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

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

Diversification Opportunities for Perpetual Credit and AMP

0.82

Correlation Coefficient

Perpetual Credit  AMP

Very poor diversification

The 3 months correlation between Perpetual and AMP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and AMP go up and down completely randomly.

Pair Corralation between Perpetual Credit and AMP

Assuming the 90 days trading horizon Perpetual Credit Income is expected to generate 0.5 times more return on investment than AMP. However, Perpetual Credit Income is 1.99 times less risky than AMP. It trades about 0.19 of its potential returns per unit of risk. AMP is currently generating about 0.05 per unit of risk. If you would invest  115.00  in Perpetual Credit Income on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Perpetual Credit Income or generate 2.61% return on investment over 90 days.

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

Perpetual Credit Income  vs.  AMP

Perpetual Credit Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetual Credit Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Perpetual Credit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AMP

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AMP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perpetual Credit and AMP

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

The idea behind Perpetual Credit Income and AMP 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.