Correlation Between Ampleforth and 1inch

Can any of the company-specific risk be diversified away by investing in both Ampleforth and 1inch 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 Ampleforth and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ampleforth and 1inch, you can compare the effects of market volatilities on Ampleforth and 1inch 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 Ampleforth with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and 1inch.

Diversification Opportunities for Ampleforth and 1inch

0.56

Correlation Coefficient

Ampleforth  1inch

Very weak diversification

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

Pair Corralation between Ampleforth and 1inch

Assuming the 90 days trading horizon Ampleforth is expected to under-perform the 1inch. In addition to that, Ampleforth is 1.75 times more volatile than 1inch. It trades about -0.18 of its total potential returns per unit of risk. 1inch is currently generating about -0.11 per unit of volatility. If you would invest  50.00  in 1inch on January 17, 2024 and sell it today you would lose (10.00) from holding 1inch or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Ampleforth  vs.  1inch

Ampleforth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ampleforth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ampleforth exhibited solid returns over the last few months and may actually be approaching a breakup point.

1inch

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1inch has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, 1inch is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ampleforth and 1inch

The main advantage of trading using opposite Ampleforth and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.

The idea behind Ampleforth and 1inch 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.