Correlation Between AMG Advanced and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Panasonic Corp 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 Panasonic Corp 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 Panasonic Corp, you can compare the effects of market volatilities on AMG Advanced and Panasonic Corp 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 Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Panasonic Corp.
Diversification Opportunities for AMG Advanced and Panasonic Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMG and Panasonic is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of AMG Advanced i.e., AMG Advanced and Panasonic Corp go up and down completely randomly.
Pair Corralation between AMG Advanced and Panasonic Corp
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Panasonic Corp. In addition to that, AMG Advanced is 1.14 times more volatile than Panasonic Corp. It trades about -0.05 of its total potential returns per unit of risk. Panasonic Corp is currently generating about 0.03 per unit of volatility. If you would invest 139,677 in Panasonic Corp on August 25, 2024 and sell it today you would earn a total of 15,423 from holding Panasonic Corp or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.88% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Panasonic Corp
Performance |
| Timeline |
| AMG Advanced Metallu |
| Panasonic Corp |
AMG Advanced and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Panasonic Corp
The main advantage of trading using opposite AMG Advanced and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Toyota Motor Corp |
| Panasonic Corp vs. AMG Advanced Metallurgical | Panasonic Corp vs. Planet Fitness Cl | Panasonic Corp vs. Endeavour Mining Corp | Panasonic Corp vs. Blackrock World Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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