Correlation Between Ocean Power and Amprius Technologies

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

Diversification Opportunities for Ocean Power and Amprius Technologies

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Ocean and Amprius is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Power Technologies and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Ocean Power 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 Ocean Power Technologies are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Ocean Power i.e., Ocean Power and Amprius Technologies go up and down completely randomly.

Pair Corralation between Ocean Power and Amprius Technologies

Given the investment horizon of 90 days Ocean Power Technologies is expected to under-perform the Amprius Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Ocean Power Technologies is 1.17 times less risky than Amprius Technologies. The stock trades about -0.27 of its potential returns per unit of risk. The Amprius Technologies is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Amprius Technologies on March 20, 2024 and sell it today you would lose (24.00) from holding Amprius Technologies or give up 18.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ocean Power Technologies  vs.  Amprius Technologies

 Performance 
       Timeline  
Ocean Power Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ocean Power Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Ocean Power and Amprius Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ocean Power and Amprius Technologies

The main advantage of trading using opposite Ocean Power and Amprius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Power position performs unexpectedly, Amprius Technologies 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 Amprius Technologies will offset losses from the drop in Amprius Technologies' long position.
The idea behind Ocean Power Technologies and Amprius Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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