Correlation Between AMG Advanced and American International
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and American International 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 American International 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 American International Group, you can compare the effects of market volatilities on AMG Advanced and American International 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 American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and American International.
Diversification Opportunities for AMG Advanced and American International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMG and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International 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 American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of AMG Advanced i.e., AMG Advanced and American International go up and down completely randomly.
Pair Corralation between AMG Advanced and American International
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the American International. In addition to that, AMG Advanced is 1.64 times more volatile than American International Group. It trades about -0.06 of its total potential returns per unit of risk. American International Group is currently generating about 0.03 per unit of volatility. If you would invest 6,374 in American International Group on September 4, 2024 and sell it today you would earn a total of 1,250 from holding American International Group or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. American International Group
Performance |
| Timeline |
| AMG Advanced Metallu |
| American International |
AMG Advanced and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and American International
The main advantage of trading using opposite AMG Advanced and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.| AMG Advanced vs. Coor Service Management | AMG Advanced vs. Telecom Italia SpA | AMG Advanced vs. Zoom Video Communications | AMG Advanced vs. Vulcan Materials Co |
| American International vs. Wheaton Precious Metals | American International vs. Golden Metal Resources | American International vs. Adriatic Metals | American International vs. Neometals |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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