Correlation Between Semiconductor Bear and AMP

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Can any of the company-specific risk be diversified away by investing in both Semiconductor Bear and AMP 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 Semiconductor Bear and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semiconductor Bear 3X and AMP LIMITED, you can compare the effects of market volatilities on Semiconductor Bear and AMP 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 Semiconductor Bear with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Bear and AMP.

Diversification Opportunities for Semiconductor Bear and AMP

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Semiconductor and AMP is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Bear 3X and AMP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP LIMITED and Semiconductor Bear 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 Semiconductor Bear 3X are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP LIMITED has no effect on the direction of Semiconductor Bear i.e., Semiconductor Bear and AMP go up and down completely randomly.

Pair Corralation between Semiconductor Bear and AMP

Given the investment horizon of 90 days Semiconductor Bear 3X is expected to under-perform the AMP. In addition to that, Semiconductor Bear is 2.51 times more volatile than AMP LIMITED. It trades about -0.02 of its total potential returns per unit of risk. AMP LIMITED is currently generating about -0.01 per unit of volatility. If you would invest  381.00  in AMP LIMITED on July 7, 2022 and sell it today you would lose (86.00)  from holding AMP LIMITED or give up 22.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy91.75%
ValuesDaily Returns

Semiconductor Bear 3X  vs.  AMP LIMITED

 Performance (%) 
       Timeline  
Semiconductor Bear 
Semiconductor Performance
0 of 100
Over the last 90 days Semiconductor Bear 3X has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Semiconductor Bear is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Semiconductor Price Channel

AMP LIMITED 
AMP Performance
0 of 100
Over the last 90 days AMP LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AMP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Semiconductor Bear and AMP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Semiconductor Bear and AMP

The main advantage of trading using opposite Semiconductor Bear and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Bear position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.
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The idea behind Semiconductor Bear 3X and AMP LIMITED 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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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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