Correlation Between Pioneer Power and Amprius Technologies

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

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

Diversification Opportunities for Pioneer Power and Amprius Technologies

0.67

Correlation Coefficient

Pioneer Power  Amprius Technologies

Poor diversification

The 3 months correlation between Pioneer and Amprius is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Power Solutions and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Pioneer Power 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 Pioneer Power Solutions are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Pioneer Power i.e., Pioneer Power and Amprius Technologies go up and down completely randomly.

Pair Corralation between Pioneer Power and Amprius Technologies

Given the investment horizon of 90 days Pioneer Power is expected to generate 3.96 times less return on investment than Amprius Technologies. But when comparing it to its historical volatility, Pioneer Power Solutions is 2.83 times less risky than Amprius Technologies. It trades about 0.11 of its potential returns per unit of risk. Amprius Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Amprius Technologies on September 16, 2024 and sell it today you would earn a total of  84.00  from holding Amprius Technologies or generate 96.55% return on investment over 90 days.

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

Pioneer Power Solutions  vs.  Amprius Technologies

Pioneer Power Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Power Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Pioneer Power demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Amprius Technologies

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Pioneer Power and Amprius Technologies

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

The idea behind Pioneer Power Solutions and Amprius Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.