Correlation Between Amg Managers and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Amg Southernsun 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 Managers and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Managers Fairpointe and Amg Southernsun Equity, you can compare the effects of market volatilities on Amg Managers and Amg Southernsun 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 Managers with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Amg Southernsun.
Diversification Opportunities for Amg Managers and Amg Southernsun
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Amg is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Fairpointe and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity and Amg Managers 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 Managers Fairpointe are associated (or correlated) with Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Amg Managers i.e., Amg Managers and Amg Southernsun go up and down completely randomly.
Pair Corralation between Amg Managers and Amg Southernsun
Assuming the 90 days horizon Amg Managers is expected to generate 1.12 times less return on investment than Amg Southernsun. But when comparing it to its historical volatility, Amg Managers Fairpointe is 1.42 times less risky than Amg Southernsun. It trades about 0.18 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,282 in Amg Southernsun Equity on November 9, 2024 and sell it today you would earn a total of 37.00 from holding Amg Southernsun Equity or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Fairpointe vs. Amg Southernsun Equity
Performance |
| Timeline |
| Amg Managers Fairpointe |
| Amg Southernsun Equity |
Amg Managers and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Amg Southernsun
The main advantage of trading using opposite Amg Managers and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Amg Southernsun 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 Southernsun will offset losses from the drop in Amg Southernsun's long position.| Amg Managers vs. Vanguard Small Cap Value | Amg Managers vs. Queens Road Small | Amg Managers vs. Fpa Queens Road | Amg Managers vs. Valic Company I |
| Amg Southernsun vs. Amg Southernsun Small | Amg Southernsun vs. Amg Southernsun Equity | Amg Southernsun vs. Cambiar International Equity | Amg Southernsun vs. Astoncrosswind 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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