Correlation Between Compania and Advanced Micro

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

By analyzing existing cross correlation between Compania de Transporte and Advanced Micro Devices,, you can compare the effects of market volatilities on Compania and Advanced Micro 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 Compania with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Advanced Micro.

Diversification Opportunities for Compania and Advanced Micro

0.11

Correlation Coefficient

Compania  Advanced Micro

Average diversification

The 3 months correlation between Compania and Advanced is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Advanced Micro Devices, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices, and Compania 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 Compania de Transporte are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices, has no effect on the direction of Compania i.e., Compania and Advanced Micro go up and down completely randomly.

Pair Corralation between Compania and Advanced Micro

Assuming the 90 days trading horizon Compania is expected to generate 3.19 times less return on investment than Advanced Micro. In addition to that, Compania is 1.37 times more volatile than Advanced Micro Devices,. It trades about 0.1 of its total potential returns per unit of risk. Advanced Micro Devices, is currently generating about 0.45 per unit of volatility. If you would invest  968,000  in Advanced Micro Devices, on April 21, 2025 and sell it today you would earn a total of  1,064,500  from holding Advanced Micro Devices, or generate 109.97% return on investment over 90 days.

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

Compania de Transporte  vs.  Advanced Micro Devices,

Compania de Transporte

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Transporte are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compania sustained solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro Devices,

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices, are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Advanced Micro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compania and Advanced Micro

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

The idea behind Compania de Transporte and Advanced Micro Devices, 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 Anywhere module to track or share privately all of your investments from the convenience of any device.