Correlation Between AMG Advanced and Trip Group
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Trip Group 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 AMG Advanced and Trip Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Trip Group Ltd, you can compare the effects of market volatilities on AMG Advanced and Trip Group 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 AMG Advanced with a short position of Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Trip Group.
Diversification Opportunities for AMG Advanced and Trip Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMG and Trip is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Trip Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group has no effect on the direction of AMG Advanced i.e., AMG Advanced and Trip Group go up and down completely randomly.
Pair Corralation between AMG Advanced and Trip Group
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Trip Group. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 11.25 times less risky than Trip Group. The stock trades about -0.09 of its potential returns per unit of risk. The Trip Group Ltd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,225 in Trip Group Ltd on September 2, 2024 and sell it today you would earn a total of 1,239 from holding Trip Group Ltd or generate 23.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Trip Group Ltd
Performance |
| Timeline |
| AMG Advanced Metallu |
| Trip Group |
AMG Advanced and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Trip Group
The main advantage of trading using opposite AMG Advanced and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group's long position.| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
| Trip Group vs. Uniper SE | Trip Group vs. Mulberry Group PLC | Trip Group vs. London Security Plc | Trip Group vs. Triad Group PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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