Correlation Between AMG Advanced and Pets At
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Pets At 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 Pets At 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 Pets at Home, you can compare the effects of market volatilities on AMG Advanced and Pets At 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 Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Pets At.
Diversification Opportunities for AMG Advanced and Pets At
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMG and Pets is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of AMG Advanced i.e., AMG Advanced and Pets At go up and down completely randomly.
Pair Corralation between AMG Advanced and Pets At
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 0.51 times more return on investment than Pets At. However, AMG Advanced Metallurgical is 1.95 times less risky than Pets At. It trades about -0.23 of its potential returns per unit of risk. Pets at Home is currently generating about -0.32 per unit of risk. If you would invest 1,486 in AMG Advanced Metallurgical on September 24, 2024 and sell it today you would lose (139.00) from holding AMG Advanced Metallurgical or give up 9.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Pets at Home
Performance |
| Timeline |
| AMG Advanced Metallu |
| Pets at Home |
AMG Advanced and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Pets At
The main advantage of trading using opposite AMG Advanced and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At's long position.| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
| Pets At vs. AMG Advanced Metallurgical | Pets At vs. Monster Beverage Corp | Pets At vs. International Biotechnology Trust | Pets At vs. Panther Metals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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