Correlation Between Small Pany and Amana Developing

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

By analyzing existing cross correlation between Small Pany Fund and Amana Developing World, you can compare the effects of market volatilities on Small Pany and Amana Developing 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 Small Pany with a short position of Amana Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and Amana Developing.

Diversification Opportunities for Small Pany and Amana Developing

0.45

Correlation Coefficient

Small Pany  Amana Developing

Very weak diversification

The 3 months correlation between Small and Amana is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Fund and Amana Developing World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Developing World and Small Pany 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 Small Pany Fund are associated (or correlated) with Amana Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Developing World has no effect on the direction of Small Pany i.e., Small Pany and Amana Developing go up and down completely randomly.

Pair Corralation between Small Pany and Amana Developing

Assuming the 90 days horizon Small Pany is expected to generate 1.55 times less return on investment than Amana Developing. In addition to that, Small Pany is 1.56 times more volatile than Amana Developing World. It trades about 0.12 of its total potential returns per unit of risk. Amana Developing World is currently generating about 0.28 per unit of volatility. If you would invest  1,368  in Amana Developing World on August 1, 2025 and sell it today you would earn a total of  197.00  from holding Amana Developing World or generate 14.4% return on investment over 90 days.

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

Small Pany Fund  vs.  Amana Developing World

Small Pany Fund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Pany Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small Pany may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Amana Developing World

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amana Developing World are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Amana Developing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Small Pany and Amana Developing

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

The idea behind Small Pany Fund and Amana Developing World 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.