Correlation Between AMG Advanced and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on AMG Advanced and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Lindsell Train.
Diversification Opportunities for AMG Advanced and Lindsell Train
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and Lindsell is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of AMG Advanced i.e., AMG Advanced and Lindsell Train go up and down completely randomly.
Pair Corralation between AMG Advanced and Lindsell Train
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Lindsell Train. In addition to that, AMG Advanced is 1.76 times more volatile than Lindsell Train Investment. It trades about -0.06 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.04 per unit of volatility. If you would invest 101,489 in Lindsell Train Investment on August 24, 2024 and sell it today you would lose (29,689) from holding Lindsell Train Investment or give up 29.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Lindsell Train Investment
Performance |
| Timeline |
| AMG Advanced Metallu |
| Lindsell Train Investment |
AMG Advanced and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Lindsell Train
The main advantage of trading using opposite AMG Advanced and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| AMG Advanced vs. Quadrise Plc | AMG Advanced vs. Intuitive Investments Group | AMG Advanced vs. European Metals Holdings | AMG Advanced vs. Athelney Trust plc |
| Lindsell Train vs. Home Depot | Lindsell Train vs. River and Mercantile | Lindsell Train vs. Chrysalis Investments | Lindsell Train vs. Sherborne Investors Guernsey |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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