Correlation Between MLP Group and Amica SA

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

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

Diversification Opportunities for MLP Group and Amica SA

-0.43

Correlation Coefficient

MLP Group  Amica SA

Very good diversification

The 3 months correlation between MLP and Amica is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MLP Group SA and Amica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amica SA and MLP Group 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 MLP Group SA are associated (or correlated) with Amica SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amica SA has no effect on the direction of MLP Group i.e., MLP Group and Amica SA go up and down completely randomly.

Pair Corralation between MLP Group and Amica SA

Assuming the 90 days trading horizon MLP Group SA is expected to under-perform the Amica SA. But the stock apears to be less risky and, when comparing its historical volatility, MLP Group SA is 1.03 times less risky than Amica SA. The stock trades about -0.08 of its potential returns per unit of risk. The Amica SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  6,390  in Amica SA on August 30, 2024 and sell it today you would lose (320.00) from holding Amica SA or give up 5.01% of portfolio value over 90 days.

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

MLP Group SA  vs.  Amica SA

MLP Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MLP Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Amica SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amica SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Amica SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MLP Group and Amica SA

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

The idea behind MLP Group SA and Amica 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.