Correlation Between Ampleforth and My Neighbor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ampleforth and My Neighbor 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 Ampleforth and My Neighbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and My Neighbor Alice, you can compare the effects of market volatilities on Ampleforth and My Neighbor 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 Ampleforth with a short position of My Neighbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and My Neighbor.

Diversification Opportunities for Ampleforth and My Neighbor

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Ampleforth and ALICE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and My Neighbor Alice in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on My Neighbor Alice and Ampleforth 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 Ampleforth are associated (or correlated) with My Neighbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of My Neighbor Alice has no effect on the direction of Ampleforth i.e., Ampleforth and My Neighbor go up and down completely randomly.

Pair Corralation between Ampleforth and My Neighbor

Assuming the 90 days trading horizon Ampleforth is expected to generate 0.92 times more return on investment than My Neighbor. However, Ampleforth is 1.08 times less risky than My Neighbor. It trades about -0.01 of its potential returns per unit of risk. My Neighbor Alice is currently generating about -0.06 per unit of risk. If you would invest  166.00  in Ampleforth on February 18, 2022 and sell it today you would lose (77.00)  from holding Ampleforth or give up 46.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.34%
ValuesDaily Returns

Ampleforth  vs.  My Neighbor Alice

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

Ampleforth Price Channel

My Neighbor Alice 
ALICE Performance
0 of 100
Over the last 90 days My Neighbor Alice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for My Neighbor Alice investors.

ALICE Price Channel

Ampleforth and My Neighbor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ampleforth and My Neighbor

The main advantage of trading using opposite Ampleforth and My Neighbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, My Neighbor 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 My Neighbor will offset losses from the drop in My Neighbor's long position.
The idea behind Ampleforth and My Neighbor Alice 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
CEO Directory
Screen CEOs from public companies around the world
Go