Correlation Between AMG Advanced and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and GlobalData 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 GlobalData 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 GlobalData PLC, you can compare the effects of market volatilities on AMG Advanced and GlobalData 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and GlobalData PLC.
Diversification Opportunities for AMG Advanced and GlobalData PLC
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AMG and GlobalData is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of AMG Advanced i.e., AMG Advanced and GlobalData PLC go up and down completely randomly.
Pair Corralation between AMG Advanced and GlobalData PLC
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 1.63 times more return on investment than GlobalData PLC. However, AMG Advanced is 1.63 times more volatile than GlobalData PLC. It trades about -0.02 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.15 per unit of risk. If you would invest 1,413 in AMG Advanced Metallurgical on October 30, 2024 and sell it today you would lose (60.00) from holding AMG Advanced Metallurgical or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. GlobalData PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| GlobalData PLC |
AMG Advanced and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and GlobalData PLC
The main advantage of trading using opposite AMG Advanced and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, GlobalData 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| AMG Advanced vs. Electronic Arts | AMG Advanced vs. Catalyst Media Group | AMG Advanced vs. Hollywood Bowl Group | AMG Advanced vs. Molson Coors Beverage |
| GlobalData PLC vs. Viridian Therapeutics | GlobalData PLC vs. Nationwide Building Society | GlobalData PLC vs. Digital Realty Trust | GlobalData PLC vs. Dollar Tree |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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