Correlation Between Amprius Technologies and Advanced Energy

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

Diversification Opportunities for Amprius Technologies and Advanced Energy

0.23
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Amprius Technologies and Advanced Energy

Given the investment horizon of 90 days Amprius Technologies is expected to under-perform the Advanced Energy. In addition to that, Amprius Technologies is 6.41 times more volatile than Advanced Energy Industries. It trades about -0.07 of its total potential returns per unit of risk. Advanced Energy Industries is currently generating about 0.56 per unit of volatility. If you would invest  9,103  in Advanced Energy Industries on February 21, 2024 and sell it today you would earn a total of  1,631  from holding Advanced Energy Industries or generate 17.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Amprius Technologies  vs.  Advanced Energy Industries

 Performance 
       Timeline  
Amprius Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amprius Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Advanced Energy Indu 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Energy Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal forward indicators, Advanced Energy may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Amprius Technologies and Advanced Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amprius Technologies and Advanced Energy

The main advantage of trading using opposite Amprius Technologies and Advanced Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amprius Technologies position performs unexpectedly, Advanced Energy 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 Advanced Energy will offset losses from the drop in Advanced Energy's long position.
The idea behind Amprius Technologies and Advanced Energy Industries 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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