Correlation Between Amerisourcebergen and Chembio Diagnostics

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Can any of the company-specific risk be diversified away by investing in both Amerisourcebergen and Chembio Diagnostics 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 Amerisourcebergen and Chembio Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amerisourcebergen Corp and Chembio Diagnostics, you can compare the effects of market volatilities on Amerisourcebergen and Chembio Diagnostics 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 Amerisourcebergen with a short position of Chembio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amerisourcebergen and Chembio Diagnostics.

Diversification Opportunities for Amerisourcebergen and Chembio Diagnostics

  Correlation Coefficient

Modest diversification

The 3 months correlation between Amerisourcebergen and Chembio is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amerisourcebergen Corp and Chembio Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chembio Diagnostics and Amerisourcebergen 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 Amerisourcebergen Corp are associated (or correlated) with Chembio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chembio Diagnostics has no effect on the direction of Amerisourcebergen i.e., Amerisourcebergen and Chembio Diagnostics go up and down completely randomly.

Pair Corralation between Amerisourcebergen and Chembio Diagnostics

Considering the 90-day investment horizon Amerisourcebergen Corp is expected to generate 0.22 times more return on investment than Chembio Diagnostics. However, Amerisourcebergen Corp is 4.55 times less risky than Chembio Diagnostics. It trades about -0.31 of its potential returns per unit of risk. Chembio Diagnostics is currently generating about -0.44 per unit of risk. If you would invest  14,749  in Amerisourcebergen Corp on June 30, 2022 and sell it today you would lose (1,205)  from holding Amerisourcebergen Corp or give up 8.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Amerisourcebergen Corp  vs.  Chembio Diagnostics

 Performance (%) 
Amerisourcebergen Corp 
Amerisourcebergen Performance
0 of 100
Over the last 90 days Amerisourcebergen Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Amerisourcebergen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Amerisourcebergen Price Channel

Chembio Diagnostics 
Chembio Performance
0 of 100
Over the last 90 days Chembio Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Chembio Price Channel

Amerisourcebergen and Chembio Diagnostics Volatility Contrast

   Predicted Return Density   

Pair Trading with Amerisourcebergen and Chembio Diagnostics

The main advantage of trading using opposite Amerisourcebergen and Chembio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amerisourcebergen position performs unexpectedly, Chembio Diagnostics 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 Chembio Diagnostics will offset losses from the drop in Chembio Diagnostics' long position.
Amerisourcebergen vs. Sunrun Inc
The idea behind Amerisourcebergen Corp and Chembio Diagnostics 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.
Chembio Diagnostics vs. Kibush Capital Corp
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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