Correlation Between Amer Sports, and Ermenegildo Zegna

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

By analyzing existing cross correlation between Amer Sports, and Ermenegildo Zegna NV, you can compare the effects of market volatilities on Amer Sports, and Ermenegildo Zegna 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 Amer Sports, with a short position of Ermenegildo Zegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Ermenegildo Zegna.

Diversification Opportunities for Amer Sports, and Ermenegildo Zegna

0.67

Correlation Coefficient

Amer Sports,  Ermenegildo Zegna

Poor diversification

The 3 months correlation between Amer and Ermenegildo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Ermenegildo Zegna NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ermenegildo Zegna and Amer Sports, 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 Amer Sports, are associated (or correlated) with Ermenegildo Zegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ermenegildo Zegna has no effect on the direction of Amer Sports, i.e., Amer Sports, and Ermenegildo Zegna go up and down completely randomly.

Pair Corralation between Amer Sports, and Ermenegildo Zegna

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.8 times more return on investment than Ermenegildo Zegna. However, Amer Sports, is 1.8 times more volatile than Ermenegildo Zegna NV. It trades about 0.21 of its potential returns per unit of risk. Ermenegildo Zegna NV is currently generating about 0.02 per unit of risk. If you would invest  2,557  in Amer Sports, on May 6, 2025 and sell it today you would earn a total of  1,314  from holding Amer Sports, or generate 51.39% return on investment over 90 days.

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

Amer Sports,  vs.  Ermenegildo Zegna NV

Amer Sports,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ermenegildo Zegna

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ermenegildo Zegna NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Ermenegildo Zegna is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amer Sports, and Ermenegildo Zegna

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

The idea behind Amer Sports, and Ermenegildo Zegna NV 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.