Correlation Between Simulations Plus and AmerisourceBergen

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

Diversification Opportunities for Simulations Plus and AmerisourceBergen

  Correlation Coefficient

Very good diversification

The 3 months correlation between Simulations and AmerisourceBergen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Simulations Plus and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen and Simulations Plus 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 Simulations Plus are associated (or correlated) with AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Simulations Plus i.e., Simulations Plus and AmerisourceBergen go up and down completely randomly.

Pair Corralation between Simulations Plus and AmerisourceBergen

Considering the 90-day investment horizon Simulations Plus is expected to under-perform the AmerisourceBergen. In addition to that, Simulations Plus is 2.08 times more volatile than AmerisourceBergen. It trades about -0.02 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.09 per unit of volatility. If you would invest  13,636  in AmerisourceBergen on December 22, 2022 and sell it today you would earn a total of  1,959  from holding AmerisourceBergen or generate 14.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
ValuesDaily Returns

Simulations Plus  vs.  AmerisourceBergen

 Performance (%) 
Simulations Plus 

Simulations Performance

9 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Simulations Plus are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, Simulations Plus reported solid returns over the last few months and may actually be approaching a breakup point.

AmerisourceBergen Performance

0 of 100

Over the last 90 days AmerisourceBergen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Simulations Plus and AmerisourceBergen Volatility Contrast

   Predicted Return Density   

Pair Trading with Simulations Plus and AmerisourceBergen

The main advantage of trading using opposite Simulations Plus and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simulations Plus position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.
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The idea behind Simulations Plus and AmerisourceBergen 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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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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