Correlation Between Rockwell Automation and Amprius Technologies

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

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

Diversification Opportunities for Rockwell Automation and Amprius Technologies

0.14

Correlation Coefficient

Rockwell Automation  Amprius Technologies

Average diversification

The 3 months correlation between Rockwell and Amprius is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation i.e., Rockwell Automation and Amprius Technologies go up and down completely randomly.

Pair Corralation between Rockwell Automation and Amprius Technologies

Considering the 90-day investment horizon Rockwell Automation is expected to under-perform the Amprius Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Rockwell Automation is 9.51 times less risky than Amprius Technologies. The stock trades about -0.21 of its potential returns per unit of risk. The Amprius Technologies is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  195.00  in Amprius Technologies on October 11, 2024 and sell it today you would earn a total of  108.00  from holding Amprius Technologies or generate 55.38% return on investment over 90 days.

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

Rockwell Automation  vs.  Amprius Technologies

Rockwell Automation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rockwell Automation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Rockwell Automation is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Amprius Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 13 (%) 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 Rockwell Automation and Amprius Technologies

The main advantage of trading using opposite Rockwell Automation and Amprius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation 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 Rockwell Automation 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.