Correlation Between Amprius Technologies and Geo Energy

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

By analyzing existing cross correlation between Amprius Technologies and Geo Energy Resources, you can compare the effects of market volatilities on Amprius Technologies and Geo Energy 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 Amprius Technologies with a short position of Geo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amprius Technologies and Geo Energy.

Diversification Opportunities for Amprius Technologies and Geo Energy

-0.7

Correlation Coefficient

Amprius Technologies  Geo Energy

Excellent diversification

The 3 months correlation between Amprius and Geo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amprius Technologies and Geo Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Energy Resources and Amprius Technologies 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 Amprius Technologies are associated (or correlated) with Geo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geo Energy Resources has no effect on the direction of Amprius Technologies i.e., Amprius Technologies and Geo Energy go up and down completely randomly.

Pair Corralation between Amprius Technologies and Geo Energy

Given the investment horizon of 90 days Amprius Technologies is expected to generate 3.91 times more return on investment than Geo Energy. However, Amprius Technologies is 3.91 times more volatile than Geo Energy Resources. It trades about 0.17 of its potential returns per unit of risk. Geo Energy Resources is currently generating about -0.22 per unit of risk. If you would invest  111.00  in Amprius Technologies on July 30, 2024 and sell it today you would earn a total of  26.00  from holding Amprius Technologies or generate 23.42% return on investment over 90 days.

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

Amprius Technologies  vs.  Geo Energy Resources

Amprius Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Geo Energy Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geo Energy Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Geo Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amprius Technologies and Geo Energy

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

The idea behind Amprius Technologies and Geo Energy Resources 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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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.