Correlation Between Aminologics CoLtd and Sam-A Pharm

Can any of the company-specific risk be diversified away by investing in both Aminologics CoLtd and Sam-A Pharm 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 Aminologics CoLtd and Sam-A Pharm into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aminologics CoLtd and Sam A Pharm Co, you can compare the effects of market volatilities on Aminologics CoLtd and Sam-A Pharm 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 Aminologics CoLtd with a short position of Sam-A Pharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aminologics CoLtd and Sam-A Pharm.

Diversification Opportunities for Aminologics CoLtd and Sam-A Pharm

0.95

Correlation Coefficient

Aminologics CoLtd  Sam-A Pharm

Almost no diversification

The 3 months correlation between Aminologics and Sam-A is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aminologics CoLtd and Sam A Pharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam A Pharm and Aminologics CoLtd 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 Aminologics CoLtd are associated (or correlated) with Sam-A Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam A Pharm has no effect on the direction of Aminologics CoLtd i.e., Aminologics CoLtd and Sam-A Pharm go up and down completely randomly.

Pair Corralation between Aminologics CoLtd and Sam-A Pharm

Assuming the 90 days trading horizon Aminologics CoLtd is expected to under-perform the Sam-A Pharm. But the stock apears to be less risky and, when comparing its historical volatility, Aminologics CoLtd is 1.13 times less risky than Sam-A Pharm. The stock trades about -0.05 of its potential returns per unit of risk. The Sam A Pharm Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,577,052  in Sam A Pharm Co on September 12, 2024 and sell it today you would earn a total of  82,948  from holding Sam A Pharm Co or generate 5.26% return on investment over 90 days.

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

Aminologics CoLtd  vs.  Sam A Pharm Co

Aminologics CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aminologics CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sam A Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sam A Pharm Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aminologics CoLtd and Sam-A Pharm

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

The idea behind Aminologics CoLtd and Sam A Pharm Co 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..