Correlation Between AmeraMex International and Arcane Crypto

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

By analyzing existing cross correlation between AmeraMex International and Arcane Crypto AB, you can compare the effects of market volatilities on AmeraMex International and Arcane Crypto 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 AmeraMex International with a short position of Arcane Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeraMex International and Arcane Crypto.

Diversification Opportunities for AmeraMex International and Arcane Crypto

0.38

Correlation Coefficient

AmeraMex International  Arcane Crypto

Weak diversification

The 3 months correlation between AmeraMex and Arcane is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Arcane Crypto AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcane Crypto AB and AmeraMex International 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 AmeraMex International are associated (or correlated) with Arcane Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcane Crypto AB has no effect on the direction of AmeraMex International i.e., AmeraMex International and Arcane Crypto go up and down completely randomly.

Pair Corralation between AmeraMex International and Arcane Crypto

Given the investment horizon of 90 days AmeraMex International is expected to generate 0.72 times more return on investment than Arcane Crypto. However, AmeraMex International is 1.39 times less risky than Arcane Crypto. It trades about -0.04 of its potential returns per unit of risk. Arcane Crypto AB is currently generating about -0.13 per unit of risk. If you would invest  36.00  in AmeraMex International on September 12, 2024 and sell it today you would lose (14.00) from holding AmeraMex International or give up 38.89% of portfolio value over 90 days.

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

AmeraMex International  vs.  Arcane Crypto AB

AmeraMex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmeraMex International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain fairly 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.

Arcane Crypto AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcane Crypto AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AmeraMex International and Arcane Crypto

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

The idea behind AmeraMex International and Arcane Crypto AB 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.