Correlation Between ANI Pharmaceuticals and Amphastar

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

By analyzing existing cross correlation between ANI Pharmaceuticals and Amphastar P, you can compare the effects of market volatilities on ANI Pharmaceuticals and Amphastar 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 ANI Pharmaceuticals with a short position of Amphastar. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANI Pharmaceuticals and Amphastar.

Diversification Opportunities for ANI Pharmaceuticals and Amphastar

-0.79

Correlation Coefficient

ANI Pharmaceuticals  Amphastar

Pay attention - limited upside

The 3 months correlation between ANI and Amphastar is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Amphastar P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphastar P and ANI Pharmaceuticals 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 ANI Pharmaceuticals are associated (or correlated) with Amphastar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphastar P has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Amphastar go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Amphastar

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to generate 0.76 times more return on investment than Amphastar. However, ANI Pharmaceuticals is 1.31 times less risky than Amphastar. It trades about 0.08 of its potential returns per unit of risk. Amphastar P is currently generating about -0.12 per unit of risk. If you would invest  5,837  in ANI Pharmaceuticals on February 17, 2024 and sell it today you would earn a total of  540.00  from holding ANI Pharmaceuticals or generate 9.25% return on investment over 90 days.

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

ANI Pharmaceuticals  vs.  Amphastar P

ANI Pharmaceuticals

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, ANI Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Amphastar P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amphastar P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ANI Pharmaceuticals and Amphastar

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

The idea behind ANI Pharmaceuticals and Amphastar P 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.