Correlation Between AMG Advanced and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on AMG Advanced and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Hollywood Bowl.
Diversification Opportunities for AMG Advanced and Hollywood Bowl
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMG and Hollywood is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of AMG Advanced i.e., AMG Advanced and Hollywood Bowl go up and down completely randomly.
Pair Corralation between AMG Advanced and Hollywood Bowl
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Hollywood Bowl. In addition to that, AMG Advanced is 1.52 times more volatile than Hollywood Bowl Group. It trades about -0.21 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.06 per unit of volatility. If you would invest 32,650 in Hollywood Bowl Group on September 1, 2024 and sell it today you would lose (650.00) from holding Hollywood Bowl Group or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Hollywood Bowl Group
Performance |
| Timeline |
| AMG Advanced Metallu |
| Hollywood Bowl Group |
AMG Advanced and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Hollywood Bowl
The main advantage of trading using opposite AMG Advanced and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| AMG Advanced vs. DXC Technology Co | AMG Advanced vs. Uber Technologies | AMG Advanced vs. Science in Sport | AMG Advanced vs. Finnair Oyj |
| Hollywood Bowl vs. Public Storage | Hollywood Bowl vs. Optima Health plc | Hollywood Bowl vs. Bellevue Healthcare Trust | Hollywood Bowl vs. Target Healthcare REIT |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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