Correlation Between AMG Advanced and HUTCHMED China
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and HUTCHMED China 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 HUTCHMED China 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 HUTCHMED China, you can compare the effects of market volatilities on AMG Advanced and HUTCHMED China 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 HUTCHMED China. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and HUTCHMED China.
Diversification Opportunities for AMG Advanced and HUTCHMED China
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMG and HUTCHMED is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and HUTCHMED China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED China 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 HUTCHMED China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED China has no effect on the direction of AMG Advanced i.e., AMG Advanced and HUTCHMED China go up and down completely randomly.
Pair Corralation between AMG Advanced and HUTCHMED China
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 0.75 times more return on investment than HUTCHMED China. However, AMG Advanced Metallurgical is 1.34 times less risky than HUTCHMED China. It trades about -0.17 of its potential returns per unit of risk. HUTCHMED China is currently generating about -0.22 per unit of risk. If you would invest 1,614 in AMG Advanced Metallurgical on August 29, 2024 and sell it today you would lose (121.00) from holding AMG Advanced Metallurgical or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. HUTCHMED China
Performance |
| Timeline |
| AMG Advanced Metallu |
| HUTCHMED China |
AMG Advanced and HUTCHMED China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and HUTCHMED China
The main advantage of trading using opposite AMG Advanced and HUTCHMED China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, HUTCHMED China 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 HUTCHMED China will offset losses from the drop in HUTCHMED China's 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 |
| HUTCHMED China vs. Fulcrum Metals PLC | HUTCHMED China vs. Universal Music Group | HUTCHMED China vs. AMG Advanced Metallurgical | HUTCHMED China vs. National Bank of |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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