Correlation Between Ubiquiti Networks and AmpliTech

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

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

Diversification Opportunities for Ubiquiti Networks and AmpliTech

-0.56

Correlation Coefficient

Ubiquiti Networks  AmpliTech

Excellent diversification

The 3 months correlation between Ubiquiti and AmpliTech is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ubiquiti Networks and AmpliTech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmpliTech Group and Ubiquiti Networks 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 Ubiquiti Networks are associated (or correlated) with AmpliTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmpliTech Group has no effect on the direction of Ubiquiti Networks i.e., Ubiquiti Networks and AmpliTech go up and down completely randomly.

Pair Corralation between Ubiquiti Networks and AmpliTech

Allowing for the 90-day total investment horizon Ubiquiti Networks is expected to generate 2.0 times less return on investment than AmpliTech. But when comparing it to its historical volatility, Ubiquiti Networks is 10.17 times less risky than AmpliTech. It trades about 0.32 of its potential returns per unit of risk. AmpliTech Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5.10  in AmpliTech Group on August 30, 2024 and sell it today you would lose (2.70) from holding AmpliTech Group or give up 52.94% of portfolio value over 90 days.

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

Ubiquiti Networks  vs.  AmpliTech Group

Ubiquiti Networks

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ubiquiti Networks are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Ubiquiti Networks demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AmpliTech Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AmpliTech Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, AmpliTech showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ubiquiti Networks and AmpliTech

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

The idea behind Ubiquiti Networks and AmpliTech Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.