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

0.25

Correlation Coefficient

Amedica WT  Roche Holding

Modest diversification

The 3 months correlation between Amedica and Roche is 0.25. 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

If you would invest  0.04  in Amedica WT on February 7, 2024 and sell it today you would earn a total of  0.00  from holding Amedica WT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Amedica WT  vs.  Roche Holding AG

Amedica WT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedica WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Amedica WT is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Roche Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roche Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Roche Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

The idea behind Amedica WT and Roche Holding AG 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.