Correlation Between Amphenol and AstroNova
Can any of the company-specific risk be diversified away by investing in both Amphenol and AstroNova 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 Amphenol and AstroNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphenol and AstroNova, you can compare the effects of market volatilities on Amphenol and AstroNova 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 Amphenol with a short position of AstroNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphenol and AstroNova.
Diversification Opportunities for Amphenol and AstroNova
Significant diversification
The 3 months correlation between Amphenol and AstroNova is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova and Amphenol 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 Amphenol are associated (or correlated) with AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of Amphenol i.e., Amphenol and AstroNova go up and down completely randomly.
Pair Corralation between Amphenol and AstroNova
Considering the 90-day investment horizon Amphenol is expected to generate 0.87 times more return on investment than AstroNova. However, Amphenol is 1.14 times less risky than AstroNova. It trades about 0.11 of its potential returns per unit of risk. AstroNova is currently generating about -0.11 per unit of risk. If you would invest 10,959 in Amphenol on January 18, 2024 and sell it today you would earn a total of 298.00 from holding Amphenol or generate 2.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Amphenol vs. AstroNova
Performance |
Timeline |
Amphenol |
AstroNova |
Amphenol and AstroNova Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amphenol and AstroNova
The main advantage of trading using opposite Amphenol and AstroNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol position performs unexpectedly, AstroNova 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 AstroNova will offset losses from the drop in AstroNova's long position.The idea behind Amphenol and AstroNova 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.AstroNova vs. LG Display Co | AstroNova vs. Sony Corp | AstroNova vs. Sonos Inc | AstroNova vs. Vizio Holding Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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