Correlation Between AMG Advanced and Monks Investment
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Monks Investment 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 Monks Investment 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 Monks Investment Trust, you can compare the effects of market volatilities on AMG Advanced and Monks Investment 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 Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Monks Investment.
Diversification Opportunities for AMG Advanced and Monks Investment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMG and Monks is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust 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 Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of AMG Advanced i.e., AMG Advanced and Monks Investment go up and down completely randomly.
Pair Corralation between AMG Advanced and Monks Investment
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Monks Investment. In addition to that, AMG Advanced is 2.95 times more volatile than Monks Investment Trust. It trades about -0.02 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.06 per unit of volatility. If you would invest 127,000 in Monks Investment Trust on October 30, 2024 and sell it today you would earn a total of 2,600 from holding Monks Investment Trust or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Monks Investment Trust
Performance |
| Timeline |
| AMG Advanced Metallu |
| Monks Investment Trust |
AMG Advanced and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Monks Investment
The main advantage of trading using opposite AMG Advanced and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.| AMG Advanced vs. Electronic Arts | AMG Advanced vs. Catalyst Media Group | AMG Advanced vs. Hollywood Bowl Group | AMG Advanced vs. Molson Coors Beverage |
| Monks Investment vs. SupplyMe Capital PLC | Monks Investment vs. Premier African Minerals | Monks Investment vs. SANTANDER UK 8 | Monks Investment vs. Tower Resources plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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