Correlation Between AMG Advanced and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Inspiration Healthcare 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 Inspiration Healthcare 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 Inspiration Healthcare Group, you can compare the effects of market volatilities on AMG Advanced and Inspiration Healthcare 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 Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Inspiration Healthcare.
Diversification Opportunities for AMG Advanced and Inspiration Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMG and Inspiration is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare 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 Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of AMG Advanced i.e., AMG Advanced and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between AMG Advanced and Inspiration Healthcare
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 0.87 times more return on investment than Inspiration Healthcare. However, AMG Advanced Metallurgical is 1.15 times less risky than Inspiration Healthcare. It trades about -0.07 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about -0.39 per unit of risk. If you would invest 1,542 in AMG Advanced Metallurgical on September 12, 2024 and sell it today you would lose (61.00) from holding AMG Advanced Metallurgical or give up 3.96% 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. Inspiration Healthcare Group
Performance |
| Timeline |
| AMG Advanced Metallu |
| Inspiration Healthcare |
AMG Advanced and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Inspiration Healthcare
The main advantage of trading using opposite AMG Advanced and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Inspiration Healthcare 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 Inspiration Healthcare will offset losses from the drop in Inspiration Healthcare's long position.| AMG Advanced vs. Neometals | AMG Advanced vs. Bisichi Mining PLC | AMG Advanced vs. Playtech Plc | AMG Advanced vs. Metals Exploration Plc |
| Inspiration Healthcare vs. Mulberry Group PLC | Inspiration Healthcare vs. Ikigai Ventures | Inspiration Healthcare vs. Neometals | Inspiration Healthcare vs. Coor Service Management |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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