Correlation Between SPEAR Investments and AMG Advanced

Can any of the company-specific risk be diversified away by investing in both SPEAR Investments and AMG Advanced 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 SPEAR Investments and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPEAR Investments I and AMG Advanced Metallurgical, you can compare the effects of market volatilities on SPEAR Investments and AMG Advanced 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 SPEAR Investments with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPEAR Investments and AMG Advanced.

Diversification Opportunities for SPEAR Investments and AMG Advanced

-0.65

Correlation Coefficient

SPEAR Investments  AMG Advanced

Excellent diversification

The 3 months correlation between SPEAR and AMG is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPEAR Investments I and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and SPEAR Investments 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 SPEAR Investments I are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of SPEAR Investments i.e., SPEAR Investments and AMG Advanced go up and down completely randomly.

Pair Corralation between SPEAR Investments and AMG Advanced

Assuming the 90 days trading horizon SPEAR Investments I is expected to under-perform the AMG Advanced. But the stock apears to be less risky and, when comparing its historical volatility, SPEAR Investments I is 3.11 times less risky than AMG Advanced. The stock trades about -0.1 of its potential returns per unit of risk. The AMG Advanced Metallurgical is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,517  in AMG Advanced Metallurgical on April 23, 2025 and sell it today you would earn a total of  1,075  from holding AMG Advanced Metallurgical or generate 70.86% return on investment over 90 days.

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

SPEAR Investments I  vs.  AMG Advanced Metallurgical

SPEAR Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPEAR Investments I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AMG Advanced Metallu

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPEAR Investments and AMG Advanced

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

The idea behind SPEAR Investments I and AMG Advanced Metallurgical 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.