Correlation Between Procimmo Real and Ams AG

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

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

Diversification Opportunities for Procimmo Real and Ams AG

0.35

Correlation Coefficient

Procimmo Real  Ams AG

Weak diversification

The 3 months correlation between Procimmo and Ams is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Procimmo Real Estate and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG and Procimmo Real 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 Procimmo Real Estate are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of Procimmo Real i.e., Procimmo Real and Ams AG go up and down completely randomly.

Pair Corralation between Procimmo Real and Ams AG

Assuming the 90 days trading horizon Procimmo Real is expected to generate 1.22 times less return on investment than Ams AG. But when comparing it to its historical volatility, Procimmo Real Estate is 5.07 times less risky than Ams AG. It trades about 0.56 of its potential returns per unit of risk. Ams AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  636.00  in Ams AG on September 13, 2024 and sell it today you would earn a total of  72.00  from holding Ams AG or generate 11.32% return on investment over 90 days.

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

Procimmo Real Estate  vs.  Ams AG

Procimmo Real Estate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Procimmo Real Estate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Procimmo Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Procimmo Real and Ams AG

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

The idea behind Procimmo Real Estate and Ams AG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.