Correlation Between Aamg Funds and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Aamg Funds 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 Aamg Funds and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aamg Funds Iv and Amg Southernsun Equity, you can compare the effects of market volatilities on Aamg Funds 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 Aamg Funds with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aamg Funds and Amg Southernsun.
Diversification Opportunities for Aamg Funds and Amg Southernsun
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aamg and Amg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aamg Funds Iv 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 Aamg Funds 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 Aamg Funds Iv 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 Aamg Funds i.e., Aamg Funds and Amg Southernsun go up and down completely randomly.
Pair Corralation between Aamg Funds and Amg Southernsun
Assuming the 90 days horizon Aamg Funds Iv is expected to generate 0.58 times more return on investment than Amg Southernsun. However, Aamg Funds Iv is 1.74 times less risky than Amg Southernsun. It trades about 0.07 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about -0.05 per unit of risk. If you would invest 1,793 in Aamg Funds Iv on November 1, 2024 and sell it today you would earn a total of 79.00 from holding Aamg Funds Iv or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aamg Funds Iv vs. Amg Southernsun Equity
Performance |
| Timeline |
| Aamg Funds Iv |
| Amg Southernsun Equity |
Aamg Funds and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aamg Funds and Amg Southernsun
The main advantage of trading using opposite Aamg Funds and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aamg Funds 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.| Aamg Funds vs. Virtus Select Mlp | Aamg Funds vs. World Energy Fund | Aamg Funds vs. Adams Natural Resources | Aamg Funds vs. Transamerica Mlp Energy |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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