Correlation Between AMG Advanced and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on AMG Advanced and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Baker Hughes.
Diversification Opportunities for AMG Advanced and Baker Hughes
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMG and Baker is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of AMG Advanced i.e., AMG Advanced and Baker Hughes go up and down completely randomly.
Pair Corralation between AMG Advanced and Baker Hughes
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Baker Hughes. In addition to that, AMG Advanced is 1.4 times more volatile than Baker Hughes Co. It trades about -0.05 of its total potential returns per unit of risk. Baker Hughes Co is currently generating about 0.09 per unit of volatility. If you would invest 2,994 in Baker Hughes Co on October 10, 2024 and sell it today you would earn a total of 1,314 from holding Baker Hughes Co or generate 43.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Baker Hughes Co
Performance |
| Timeline |
| AMG Advanced Metallu |
| Baker Hughes |
AMG Advanced and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Baker Hughes
The main advantage of trading using opposite AMG Advanced and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| AMG Advanced vs. Vitec Software Group | AMG Advanced vs. Take Two Interactive Software | AMG Advanced vs. Primorus Investments plc | AMG Advanced vs. FC Investment Trust |
| Baker Hughes vs. Kaufman Et Broad | Baker Hughes vs. Eastinco Mining Exploration | Baker Hughes vs. Beowulf Mining | Baker Hughes vs. GoldMining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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