Correlation Between AstroNova and Amphenol

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Can any of the company-specific risk be diversified away by investing in both AstroNova and Amphenol 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 AstroNova and Amphenol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstroNova and Amphenol, you can compare the effects of market volatilities on AstroNova and Amphenol 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 AstroNova with a short position of Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstroNova and Amphenol.

Diversification Opportunities for AstroNova and Amphenol

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between AstroNova and Amphenol is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol and AstroNova 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 AstroNova are associated (or correlated) with Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of AstroNova i.e., AstroNova and Amphenol go up and down completely randomly.

Pair Corralation between AstroNova and Amphenol

Given the investment horizon of 90 days AstroNova is expected to generate 1.77 times less return on investment than Amphenol. In addition to that, AstroNova is 1.52 times more volatile than Amphenol. It trades about 0.03 of its total potential returns per unit of risk. Amphenol is currently generating about 0.07 per unit of volatility. If you would invest  7,178  in Amphenol on December 29, 2023 and sell it today you would earn a total of  4,352  from holding Amphenol or generate 60.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

AstroNova  vs.  Amphenol

 Performance 
       Timeline  
AstroNova 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AstroNova are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, AstroNova may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Amphenol 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Amphenol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AstroNova and Amphenol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AstroNova and Amphenol

The main advantage of trading using opposite AstroNova and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.
The idea behind AstroNova and Amphenol 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.
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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