Correlation Between SAF Special and Amata Public

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

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

Diversification Opportunities for SAF Special and Amata Public

0.35

Correlation Coefficient

SAF Special  Amata Public

Weak diversification

The 3 months correlation between SAF and Amata is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and Amata Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Public and SAF Special 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 SAF Special Steel are associated (or correlated) with Amata Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Public has no effect on the direction of SAF Special i.e., SAF Special and Amata Public go up and down completely randomly.

Pair Corralation between SAF Special and Amata Public

Assuming the 90 days trading horizon SAF Special Steel is expected to under-perform the Amata Public. In addition to that, SAF Special is 1.83 times more volatile than Amata Public. It trades about -0.02 of its total potential returns per unit of risk. Amata Public is currently generating about 0.13 per unit of volatility. If you would invest  2,270  in Amata Public on October 26, 2024 and sell it today you would earn a total of  405.00  from holding Amata Public or generate 17.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

SAF Special Steel  vs.  Amata Public

SAF Special Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAF Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, SAF Special is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Amata Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amata Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amata Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAF Special and Amata Public

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

The idea behind SAF Special Steel and Amata Public 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.