Correlation Between Amedica WT and Roche Holding
Can any of the company-specific risk be diversified away by investing in both Amedica WT and Roche Holding 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 Amedica WT and Roche Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedica WT and Roche Holding AG, you can compare the effects of market volatilities on Amedica WT and Roche Holding 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 Amedica WT with a short position of Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedica WT and Roche Holding.
Diversification Opportunities for Amedica WT and Roche Holding
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amedica and Roche is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Amedica WT and Roche Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding AG and Amedica WT 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 Amedica WT are associated (or correlated) with Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding AG has no effect on the direction of Amedica WT i.e., Amedica WT and Roche Holding go up and down completely randomly.
Pair Corralation between Amedica WT and Roche Holding
Assuming the 90 days horizon Amedica WT is expected to generate 49.4 times more return on investment than Roche Holding. However, Amedica WT is 49.4 times more volatile than Roche Holding AG. It trades about 0.18 of its potential returns per unit of risk. Roche Holding AG is currently generating about -0.02 per unit of risk. If you would invest 1.40 in Amedica WT on January 27, 2024 and sell it today you would lose (1.36) from holding Amedica WT or give up 97.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 11.34% |
| Values | Daily Returns |
Amedica WT vs. Roche Holding AG
Performance |
| Timeline |
| Amedica WT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Roche Holding AG |
Amedica WT and Roche Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedica WT and Roche Holding
The main advantage of trading using opposite Amedica WT and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedica WT position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding's long position.| Amedica WT vs. Valhi Inc | Amedica WT vs. Allient | Amedica WT vs. Hudson Technologies | Amedica WT vs. Dow Inc |
| Roche Holding vs. Grifols SA ADR | Roche Holding vs. Pfizer Inc | Roche Holding vs. Sanofi ADR | Roche Holding vs. Organon Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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