Correlation Between Amyris and Cabot

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

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

Diversification Opportunities for Amyris and Cabot

-0.86

Correlation Coefficient

Amyris  Cabot

Pay attention - limited upside

The 3 months correlation between Amyris and Cabot is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amyris Inc and Cabot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot 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 Cabot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot has no effect on the direction of Amyris i.e., Amyris and Cabot go up and down completely randomly.

Pair Corralation between Amyris and Cabot

If you would invest  7,320  in Cabot on January 26, 2024 and sell it today you would earn a total of  2,020  from holding Cabot or generate 27.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.61%
Values	Daily Returns

Amyris Inc  vs.  Cabot

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.

Cabot

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cabot are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental drivers, Cabot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amyris and Cabot

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

The idea behind Amyris Inc and Cabot 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..