Correlation Between AmpliTech and Bridger Aerospace

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

By analyzing existing cross correlation between AmpliTech Group and Bridger Aerospace Group, you can compare the effects of market volatilities on AmpliTech and Bridger Aerospace 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 AmpliTech with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmpliTech and Bridger Aerospace.

Diversification Opportunities for AmpliTech and Bridger Aerospace

-0.52

Correlation Coefficient

AmpliTech  Bridger Aerospace

Excellent diversification

The 3 months correlation between AmpliTech and Bridger is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AmpliTech Group and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and AmpliTech 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 AmpliTech Group are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of AmpliTech i.e., AmpliTech and Bridger Aerospace go up and down completely randomly.

Pair Corralation between AmpliTech and Bridger Aerospace

Assuming the 90 days horizon AmpliTech is expected to generate 2.24 times less return on investment than Bridger Aerospace. In addition to that, AmpliTech is 1.15 times more volatile than Bridger Aerospace Group. It trades about 0.06 of its total potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.16 per unit of volatility. If you would invest  3.80  in Bridger Aerospace Group on August 30, 2024 and sell it today you would earn a total of  6.20  from holding Bridger Aerospace Group or generate 163.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

AmpliTech Group  vs.  Bridger Aerospace Group

AmpliTech Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AmpliTech Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, AmpliTech showed solid returns over the last few months and may actually be approaching a breakup point.

Bridger Aerospace

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AmpliTech and Bridger Aerospace

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

The idea behind AmpliTech Group and Bridger Aerospace Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.