Correlation Between Phala Network and AMPL

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

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

Diversification Opportunities for Phala Network and AMPL

0.24

Correlation Coefficient

Phala Network  AMPL

Modest diversification

The 3 months correlation between Phala and AMPL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and AMPL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMPL and Phala Network 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 Phala Network are associated (or correlated) with AMPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMPL has no effect on the direction of Phala Network i.e., Phala Network and AMPL go up and down completely randomly.

Pair Corralation between Phala Network and AMPL

Assuming the 90 days trading horizon Phala Network is expected to under-perform the AMPL. In addition to that, Phala Network is 2.7 times more volatile than AMPL. It trades about 0.0 of its total potential returns per unit of risk. AMPL is currently generating about 0.02 per unit of volatility. If you would invest  126.00  in AMPL on December 25, 2024 and sell it today you would lose (4.00) from holding AMPL or give up 3.17% of portfolio value over 90 days.

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

Phala Network  vs.  AMPL

Phala Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phala Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Phala Network is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AMPL

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMPL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AMPL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Phala Network and AMPL

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

The idea behind Phala Network and AMPL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.