Correlation Between Amyris and Alto Ingredients

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

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

Diversification Opportunities for Amyris and Alto Ingredients

-0.09

Correlation Coefficient

Amyris  Alto Ingredients

Good diversification

The 3 months correlation between Amyris and Alto is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Amyris Inc and Alto Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Ingredients and Amyris 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 Amyris Inc are associated (or correlated) with Alto Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Ingredients has no effect on the direction of Amyris i.e., Amyris and Alto Ingredients go up and down completely randomly.

Pair Corralation between Amyris and Alto Ingredients

If you would invest  191.00  in Alto Ingredients on January 25, 2024 and sell it today you would earn a total of  5.00  from holding Alto Ingredients or generate 2.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Amyris Inc  vs.  Alto Ingredients

Amyris Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amyris Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amyris is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alto Ingredients

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alto Ingredients are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Alto Ingredients is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amyris and Alto Ingredients

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

The idea behind Amyris Inc and Alto Ingredients 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.