Correlation Between Amphastar and Agricultural Bank

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

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

Diversification Opportunities for Amphastar and Agricultural Bank

-0.23

Correlation Coefficient

Amphastar  Agricultural Bank

Very good diversification

The 3 months correlation between Amphastar and Agricultural is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Amphastar 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 Amphastar P are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Amphastar i.e., Amphastar and Agricultural Bank go up and down completely randomly.

Pair Corralation between Amphastar and Agricultural Bank

Given the investment horizon of 90 days Amphastar P is expected to under-perform the Agricultural Bank. In addition to that, Amphastar is 1.11 times more volatile than Agricultural Bank of. It trades about -0.04 of its total potential returns per unit of risk. Agricultural Bank of is currently generating about 0.1 per unit of volatility. If you would invest  965.00  in Agricultural Bank of on March 13, 2024 and sell it today you would earn a total of  85.00  from holding Agricultural Bank of or generate 8.81% return on investment over 90 days.

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

Amphastar P  vs.  Agricultural Bank of

Amphastar P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amphastar P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Amphastar is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Agricultural Bank

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Agricultural Bank may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Amphastar and Agricultural Bank

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

The idea behind Amphastar P and Agricultural Bank of 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.