Correlation Between Capstone Green and Ametek

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

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

Diversification Opportunities for Capstone Green and Ametek

-0.89

Correlation Coefficient

Capstone Green  Ametek

Pay attention - limited upside

The 3 months correlation between Capstone and Ametek is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Green Energy and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Capstone Green 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 Capstone Green Energy are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Capstone Green i.e., Capstone Green and Ametek go up and down completely randomly.

Pair Corralation between Capstone Green and Ametek

If you would invest  20.00  in Capstone Green Energy on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Capstone Green Energy or generate 0.0% return on investment over 90 days.

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

Capstone Green Energy  vs.  Ametek Inc

Capstone Green Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capstone Green Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Capstone Green is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ametek Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal primary indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Capstone Green and Ametek

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

The idea behind Capstone Green Energy and Ametek Inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.