Correlation Between Telesat Corp and Amplitech

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

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

Diversification Opportunities for Telesat Corp and Amplitech

0.24

Correlation Coefficient

Telesat Corp  Amplitech

Modest diversification

The 3 months correlation between Telesat and Amplitech is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Telesat Corp and Amplitech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplitech Group and Telesat Corp 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 Telesat Corp are associated (or correlated) with Amplitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplitech Group has no effect on the direction of Telesat Corp i.e., Telesat Corp and Amplitech go up and down completely randomly.

Pair Corralation between Telesat Corp and Amplitech

Given the investment horizon of 90 days Telesat Corp is expected to generate 1.13 times less return on investment than Amplitech. But when comparing it to its historical volatility, Telesat Corp is 1.77 times less risky than Amplitech. It trades about 0.11 of its potential returns per unit of risk. Amplitech Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  79.00  in Amplitech Group on September 3, 2024 and sell it today you would earn a total of  15.00  from holding Amplitech Group or generate 18.99% return on investment over 90 days.

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

Telesat Corp  vs.  Amplitech Group

Telesat Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Telesat Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amplitech Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplitech Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Amplitech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telesat Corp and Amplitech

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

The idea behind Telesat Corp and Amplitech Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.