Correlation Between AMG Advanced and Empire Metals
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Empire Metals 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 Empire Metals 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 Empire Metals Limited, you can compare the effects of market volatilities on AMG Advanced and Empire Metals 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Empire Metals.
Diversification Opportunities for AMG Advanced and Empire Metals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMG and Empire is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of AMG Advanced i.e., AMG Advanced and Empire Metals go up and down completely randomly.
Pair Corralation between AMG Advanced and Empire Metals
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Empire Metals. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 2.44 times less risky than Empire Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Empire Metals Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Empire Metals Limited on August 27, 2024 and sell it today you would earn a total of 422.00 from holding Empire Metals Limited or generate 230.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Empire Metals Limited
Performance |
| Timeline |
| AMG Advanced Metallu |
| Empire Metals Limited |
AMG Advanced and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Empire Metals
The main advantage of trading using opposite AMG Advanced and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Toyota Motor Corp |
| Empire Metals vs. Playtech Plc | Empire Metals vs. HCA Healthcare | Empire Metals vs. Celebrus Technologies plc | Empire Metals vs. Roper Technologies |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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