Correlation Between Amer Sports, and E3 Metals

Can any of the company-specific risk be diversified away by investing in both Amer Sports, and E3 Metals 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 Amer Sports, and E3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amer Sports, and E3 Metals Corp, you can compare the effects of market volatilities on Amer Sports, and E3 Metals 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 Amer Sports, with a short position of E3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and E3 Metals.

Diversification Opportunities for Amer Sports, and E3 Metals

-0.78

Correlation Coefficient

Amer Sports,  E3 Metals

Pay attention - limited upside

The 3 months correlation between Amer and EEMMF is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and E3 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E3 Metals Corp and Amer Sports, 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 Amer Sports, are associated (or correlated) with E3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E3 Metals Corp has no effect on the direction of Amer Sports, i.e., Amer Sports, and E3 Metals go up and down completely randomly.

Pair Corralation between Amer Sports, and E3 Metals

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.18 times more return on investment than E3 Metals. However, Amer Sports, is 1.18 times more volatile than E3 Metals Corp. It trades about 0.31 of its potential returns per unit of risk. E3 Metals Corp is currently generating about -0.16 per unit of risk. If you would invest  1,588  in Amer Sports, on September 26, 2024 and sell it today you would earn a total of  1,290  from holding Amer Sports, or generate 81.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Amer Sports,  vs.  E3 Metals Corp

Amer Sports,

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

E3 Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E3 Metals Corp 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 primary 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 Amer Sports, and E3 Metals

The main advantage of trading using opposite Amer Sports, and E3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, E3 Metals 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 E3 Metals will offset losses from the drop in E3 Metals' long position.

The idea behind Amer Sports, and E3 Metals Corp 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.

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 the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.