Correlation Between AMS Small and Pharming Group
Can any of the company-specific risk be diversified away by investing in both AMS Small and Pharming Group 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 AMS Small and Pharming Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMS Small Cap and Pharming Group NV, you can compare the effects of market volatilities on AMS Small and Pharming Group 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 AMS Small with a short position of Pharming Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMS Small and Pharming Group.
Diversification Opportunities for AMS Small and Pharming Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMS and Pharming is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AMS Small Cap and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group NV and AMS Small 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 AMS Small Cap are associated (or correlated) with Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of AMS Small i.e., AMS Small and Pharming Group go up and down completely randomly.
Pair Corralation between AMS Small and Pharming Group
Assuming the 90 days trading horizon AMS Small is expected to generate 6.26 times less return on investment than Pharming Group. But when comparing it to its historical volatility, AMS Small Cap is 3.35 times less risky than Pharming Group. It trades about 0.05 of its potential returns per unit of risk. Pharming Group NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Pharming Group NV on September 19, 2024 and sell it today you would earn a total of 12.00 from holding Pharming Group NV or generate 16.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AMS Small Cap vs. Pharming Group NV
Performance |
Timeline |
AMS Small and Pharming Group Volatility Contrast
Predicted Return Density |
Returns |
AMS Small Cap
Pair trading matchups for AMS Small
Pharming Group NV
Pair trading matchups for Pharming Group
Pair Trading with AMS Small and Pharming Group
The main advantage of trading using opposite AMS Small and Pharming Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMS Small position performs unexpectedly, Pharming Group 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 Pharming Group will offset losses from the drop in Pharming Group's long position.AMS Small vs. Reinet Investments SCA | ||
AMS Small vs. Allfunds Group | ||
AMS Small vs. Tetragon Financial Group | ||
AMS Small vs. Universal Music Group |
Pharming Group vs. Galapagos NV | ||
Pharming Group vs. Koninklijke BAM Groep | ||
Pharming Group vs. Fugro NV | ||
Pharming Group vs. PostNL NV |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |