Correlation Between AMG Advanced and Gruppo MutuiOnline
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Gruppo MutuiOnline 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 Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA, you can compare the effects of market volatilities on AMG Advanced and Gruppo MutuiOnline 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 Gruppo MutuiOnline. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Gruppo MutuiOnline.
Diversification Opportunities for AMG Advanced and Gruppo MutuiOnline
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMG and Gruppo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Gruppo MutuiOnline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo MutuiOnline SpA 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 Gruppo MutuiOnline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo MutuiOnline SpA has no effect on the direction of AMG Advanced i.e., AMG Advanced and Gruppo MutuiOnline go up and down completely randomly.
Pair Corralation between AMG Advanced and Gruppo MutuiOnline
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 1.77 times more return on investment than Gruppo MutuiOnline. However, AMG Advanced is 1.77 times more volatile than Gruppo MutuiOnline SpA. It trades about 0.01 of its potential returns per unit of risk. Gruppo MutuiOnline SpA is currently generating about -0.12 per unit of risk. If you would invest 1,438 in AMG Advanced Metallurgical on September 14, 2024 and sell it today you would lose (2.00) from holding AMG Advanced Metallurgical or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Gruppo MutuiOnline SpA
Performance |
| Timeline |
| AMG Advanced Metallu |
| Gruppo MutuiOnline SpA |
AMG Advanced and Gruppo MutuiOnline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Gruppo MutuiOnline
The main advantage of trading using opposite AMG Advanced and Gruppo MutuiOnline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Gruppo MutuiOnline 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 Gruppo MutuiOnline will offset losses from the drop in Gruppo MutuiOnline's long position.| AMG Advanced vs. Induction Healthcare Group | AMG Advanced vs. Zoom Video Communications | AMG Advanced vs. MyHealthChecked Plc | AMG Advanced vs. United Internet AG |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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