Correlation Between Associated Capital and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Affiliated Managers 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 Associated Capital and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Affiliated Managers Group, you can compare the effects of market volatilities on Associated Capital and Affiliated Managers 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 Associated Capital with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Affiliated Managers.
Diversification Opportunities for Associated Capital and Affiliated Managers
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and Affiliated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Associated Capital 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 Associated Capital Group are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Associated Capital i.e., Associated Capital and Affiliated Managers go up and down completely randomly.
Pair Corralation between Associated Capital and Affiliated Managers
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 1.29 times less return on investment than Affiliated Managers. In addition to that, Associated Capital is 1.04 times more volatile than Affiliated Managers Group. It trades about 0.05 of its total potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.07 per unit of volatility. If you would invest 15,628 in Affiliated Managers Group on August 27, 2024 and sell it today you would earn a total of 3,132 from holding Affiliated Managers Group or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Affiliated Managers Group
Performance |
| Timeline |
| Associated Capital |
| Affiliated Managers |
Associated Capital and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Affiliated Managers
The main advantage of trading using opposite Associated Capital and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Affiliated Managers vs. Brightsphere Investment Group | Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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