Correlation Between Airea Plc and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Airea Plc and AMG Advanced 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 Airea Plc and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airea Plc and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Airea Plc and AMG Advanced 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 Airea Plc with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airea Plc and AMG Advanced.
Diversification Opportunities for Airea Plc and AMG Advanced
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airea and AMG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Airea Plc and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Airea Plc 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 Airea Plc are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Airea Plc i.e., Airea Plc and AMG Advanced go up and down completely randomly.
Pair Corralation between Airea Plc and AMG Advanced
Assuming the 90 days trading horizon Airea Plc is expected to generate 1.81 times more return on investment than AMG Advanced. However, Airea Plc is 1.81 times more volatile than AMG Advanced Metallurgical. It trades about 0.04 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.24 per unit of risk. If you would invest 2,400 in Airea Plc on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Airea Plc or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Airea Plc vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Airea Plc |
| AMG Advanced Metallu |
Airea Plc and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airea Plc and AMG Advanced
The main advantage of trading using opposite Airea Plc and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airea Plc position performs unexpectedly, AMG Advanced 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 Advanced will offset losses from the drop in AMG Advanced's long position.| Airea Plc vs. AMG Advanced Metallurgical | Airea Plc vs. Direct Line Insurance | Airea Plc vs. Greenroc Mining PLC | Airea Plc vs. Jacquet Metal Service |
| AMG Advanced vs. Griffin Mining | AMG Advanced vs. Greenroc Mining PLC | AMG Advanced vs. International Biotechnology Trust | AMG Advanced vs. AfriTin Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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