Correlation Between AMG Advanced and United Parcel
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and United Parcel 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 United Parcel 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 United Parcel Service, you can compare the effects of market volatilities on AMG Advanced and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and United Parcel.
Diversification Opportunities for AMG Advanced and United Parcel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and United is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of AMG Advanced i.e., AMG Advanced and United Parcel go up and down completely randomly.
Pair Corralation between AMG Advanced and United Parcel
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the United Parcel. In addition to that, AMG Advanced is 1.61 times more volatile than United Parcel Service. It trades about -0.06 of its total potential returns per unit of risk. United Parcel Service is currently generating about -0.03 per unit of volatility. If you would invest 16,627 in United Parcel Service on October 12, 2024 and sell it today you would lose (4,288) from holding United Parcel Service or give up 25.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. United Parcel Service
Performance |
| Timeline |
| AMG Advanced Metallu |
| United Parcel Service |
AMG Advanced and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and United Parcel
The main advantage of trading using opposite AMG Advanced and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| AMG Advanced vs. Walmart | AMG Advanced vs. BYD Co | AMG Advanced vs. Volkswagen AG | AMG Advanced vs. Volkswagen AG Non Vtg |
| United Parcel vs. Vulcan Materials Co | United Parcel vs. AMG Advanced Metallurgical | United Parcel vs. First Class Metals | United Parcel vs. Capital Metals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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