Correlation Between Small Cap and Amer Sports,

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

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

Diversification Opportunities for Small Cap and Amer Sports,

0.0

Correlation Coefficient

Small Cap  Amer Sports,

Pay attention - limited upside

The 3 months correlation between Small and Amer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, and Small Cap 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 Small Cap Premium are associated (or correlated) with Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Small Cap i.e., Small Cap and Amer Sports, go up and down completely randomly.

Pair Corralation between Small Cap and Amer Sports,

Considering the 90-day investment horizon Small Cap is expected to generate 2.7 times less return on investment than Amer Sports,. But when comparing it to its historical volatility, Small Cap Premium is 7.93 times less risky than Amer Sports,. It trades about 0.08 of its potential returns per unit of risk. Amer Sports, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,879  in Amer Sports, on December 26, 2024 and sell it today you would earn a total of  68.00  from holding Amer Sports, or generate 2.36% return on investment over 90 days.

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

Small Cap Premium  vs.  Amer Sports,

Small Cap Premium

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Premium are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Small Cap is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Amer Sports,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amer Sports, is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Small Cap and Amer Sports,

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

The idea behind Small Cap Premium and Amer Sports, 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.