Correlation Between AMG Advanced and Airea Plc
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Airea Plc 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 Airea Plc 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 Airea Plc, you can compare the effects of market volatilities on AMG Advanced and Airea Plc 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 Airea Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Airea Plc.
Diversification Opportunities for AMG Advanced and Airea Plc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and Airea is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Airea Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airea Plc 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 Airea Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airea Plc has no effect on the direction of AMG Advanced i.e., AMG Advanced and Airea Plc go up and down completely randomly.
Pair Corralation between AMG Advanced and Airea Plc
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Airea Plc. In addition to that, AMG Advanced is 1.04 times more volatile than Airea Plc. It trades about -0.11 of its total potential returns per unit of risk. Airea Plc is currently generating about -0.04 per unit of volatility. If you would invest 3,393 in Airea Plc on September 2, 2024 and sell it today you would lose (1,193) from holding Airea Plc or give up 35.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Airea Plc
Performance |
| Timeline |
| AMG Advanced Metallu |
| Airea Plc |
AMG Advanced and Airea Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Airea Plc
The main advantage of trading using opposite AMG Advanced and Airea Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Airea Plc 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 Airea Plc will offset losses from the drop in Airea Plc's long position.| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
| Airea Plc vs. Berkshire Hathaway | Airea Plc vs. Hyundai Motor | Airea Plc vs. Samsung Electronics Co | Airea Plc vs. Samsung Electronics Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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