Correlation Between Balanced Fund and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Amg Gwk 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 Balanced Fund and Amg Gwk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund I and Amg Gwk Small, you can compare the effects of market volatilities on Balanced Fund and Amg Gwk 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 Balanced Fund with a short position of Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Amg Gwk.
Diversification Opportunities for Balanced Fund and Amg Gwk
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Amg is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund I and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small and Balanced Fund 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 Balanced Fund I are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of Balanced Fund i.e., Balanced Fund and Amg Gwk go up and down completely randomly.
Pair Corralation between Balanced Fund and Amg Gwk
Assuming the 90 days horizon Balanced Fund is expected to generate 3.35 times less return on investment than Amg Gwk. But when comparing it to its historical volatility, Balanced Fund I is 3.83 times less risky than Amg Gwk. It trades about 0.38 of its potential returns per unit of risk. Amg Gwk Small is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,199 in Amg Gwk Small on September 1, 2024 and sell it today you would earn a total of 395.00 from holding Amg Gwk Small or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Balanced Fund I vs. Amg Gwk Small
Performance |
| Timeline |
| Balanced Fund I |
| Amg Gwk Small |
Balanced Fund and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Amg Gwk
The main advantage of trading using opposite Balanced Fund and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk's long position.| Balanced Fund vs. Heritage Fund I | Balanced Fund vs. Select Fund C | Balanced Fund vs. Aqr Risk Parity | Balanced Fund vs. Ab Discovery Value |
| Amg Gwk vs. Amg Gwk Small | Amg Gwk vs. Aberdeen Small Cap | Amg Gwk vs. Poplar Forest Partners | Amg Gwk vs. Calvert Small Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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