Correlation Between Piper Sandler and Amark Preci

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

By analyzing existing cross correlation between Piper Sandler Companies and Amark Preci, you can compare the effects of market volatilities on Piper Sandler and Amark Preci 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 Piper Sandler with a short position of Amark Preci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piper Sandler and Amark Preci.

Diversification Opportunities for Piper Sandler and Amark Preci

0.5

Correlation Coefficient

Piper Sandler  Amark Preci

Very weak diversification

The 3 months correlation between Piper and Amark is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Piper Sandler Companies and Amark Preci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amark Preci and Piper Sandler 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 Piper Sandler Companies are associated (or correlated) with Amark Preci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amark Preci has no effect on the direction of Piper Sandler i.e., Piper Sandler and Amark Preci go up and down completely randomly.

Pair Corralation between Piper Sandler and Amark Preci

Given the investment horizon of 90 days Piper Sandler is expected to generate 3.61 times less return on investment than Amark Preci. But when comparing it to its historical volatility, Piper Sandler Companies is 2.27 times less risky than Amark Preci. It trades about 0.14 of its potential returns per unit of risk. Amark Preci is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,653  in Amark Preci on February 4, 2024 and sell it today you would earn a total of  1,479  from holding Amark Preci or generate 55.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Piper Sandler Companies  vs.  Amark Preci

Piper Sandler Companies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Piper Sandler Companies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Piper Sandler reported solid returns over the last few months and may actually be approaching a breakup point.

Amark Preci

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amark Preci are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Amark Preci disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Piper Sandler and Amark Preci

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

The idea behind Piper Sandler Companies and Amark Preci 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.