Correlation Between Mapfre and Amper SA

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

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

Diversification Opportunities for Mapfre and Amper SA

0.72

Correlation Coefficient

Mapfre  Amper SA

Poor diversification

The 3 months correlation between Mapfre and Amper is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Mapfre 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 Mapfre are associated (or correlated) with Amper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amper SA has no effect on the direction of Mapfre i.e., Mapfre and Amper SA go up and down completely randomly.

Pair Corralation between Mapfre and Amper SA

Assuming the 90 days trading horizon Mapfre is expected to generate 0.26 times more return on investment than Amper SA. However, Mapfre is 3.81 times less risky than Amper SA. It trades about -0.13 of its potential returns per unit of risk. Amper SA is currently generating about -0.1 per unit of risk. If you would invest  254.00  in Mapfre on September 5, 2024 and sell it today you would lose (7.00) from holding Mapfre or give up 2.76% of portfolio value over 90 days.

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

Mapfre  vs.  Amper SA

Mapfre

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Mapfre may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amper SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amper SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Amper SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mapfre and Amper SA

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

The idea behind Mapfre and Amper SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.