Correlation Between AMG Advanced and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Lendinvest 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 Lendinvest 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 Lendinvest PLC, you can compare the effects of market volatilities on AMG Advanced and Lendinvest 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Lendinvest PLC.
Diversification Opportunities for AMG Advanced and Lendinvest PLC
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and Lendinvest is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of AMG Advanced i.e., AMG Advanced and Lendinvest PLC go up and down completely randomly.
Pair Corralation between AMG Advanced and Lendinvest PLC
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Lendinvest PLC. In addition to that, AMG Advanced is 1.79 times more volatile than Lendinvest PLC. It trades about -0.21 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about 0.08 per unit of volatility. If you would invest 2,600 in Lendinvest PLC on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Lendinvest PLC or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Lendinvest PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| Lendinvest PLC |
AMG Advanced and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Lendinvest PLC
The main advantage of trading using opposite AMG Advanced and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Lendinvest 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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