Correlation Between AMG Advanced and Power Metal
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Power Metal 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 Power Metal 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 Power Metal Resources, you can compare the effects of market volatilities on AMG Advanced and Power Metal 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 Power Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Power Metal.
Diversification Opportunities for AMG Advanced and Power Metal
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMG and Power is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources 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 Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of AMG Advanced i.e., AMG Advanced and Power Metal go up and down completely randomly.
Pair Corralation between AMG Advanced and Power Metal
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Power Metal. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 2.23 times less risky than Power Metal. The stock trades about -0.22 of its potential returns per unit of risk. The Power Metal Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Power Metal Resources on August 31, 2024 and sell it today you would earn a total of 113.00 from holding Power Metal Resources or generate 8.69% 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. Power Metal Resources
Performance |
| Timeline |
| AMG Advanced Metallu |
| Power Metal Resources |
AMG Advanced and Power Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Power Metal
The main advantage of trading using opposite AMG Advanced and Power Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Power Metal 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 Power Metal will offset losses from the drop in Power Metal's long position.| AMG Advanced vs. Neometals | AMG Advanced vs. Coor Service Management | AMG Advanced vs. Aeorema Communications Plc | AMG Advanced vs. JLEN Environmental Assets |
| Power Metal vs. Hollywood Bowl Group | Power Metal vs. Centaur Media | Power Metal vs. Air Products Chemicals | Power Metal vs. Ecclesiastical Insurance Office |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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