Correlation Between HAL Trust and AMS Small

Can any of the company-specific risk be diversified away by investing in both HAL Trust and AMS Small 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 HAL Trust and AMS Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HAL Trust and AMS Small Cap, you can compare the effects of market volatilities on HAL Trust and AMS Small 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 HAL Trust with a short position of AMS Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and AMS Small.

Diversification Opportunities for HAL Trust and AMS Small

0.92

Correlation Coefficient

HAL Trust  AMS Small

Almost no diversification

The 3 months correlation between HAL and AMS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and AMS Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMS Small Cap and HAL Trust 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 HAL Trust are associated (or correlated) with AMS Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMS Small Cap has no effect on the direction of HAL Trust i.e., HAL Trust and AMS Small go up and down completely randomly.

Pair Corralation between HAL Trust and AMS Small

Assuming the 90 days trading horizon HAL Trust is expected to generate 1.07 times less return on investment than AMS Small. In addition to that, HAL Trust is 1.01 times more volatile than AMS Small Cap. It trades about 0.22 of its total potential returns per unit of risk. AMS Small Cap is currently generating about 0.23 per unit of volatility. If you would invest  135,248  in AMS Small Cap on April 24, 2025 and sell it today you would earn a total of  16,245  from holding AMS Small Cap or generate 12.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

HAL Trust  vs.  AMS Small Cap

Pair Trading with HAL Trust and AMS Small

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

The idea behind HAL Trust and AMS Small Cap 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 the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.