Correlation Between Allfunds and AMS Small
Can any of the company-specific risk be diversified away by investing in both Allfunds and AMS Small 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 Allfunds and AMS Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allfunds Group and AMS Small Cap, you can compare the effects of market volatilities on Allfunds and AMS Small 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 Allfunds with a short position of AMS Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allfunds and AMS Small.
Diversification Opportunities for Allfunds and AMS Small
Average diversification
The 3 months correlation between Allfunds and AMS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and AMS Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMS Small Cap and Allfunds 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 Allfunds Group are associated (or correlated) with AMS Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMS Small Cap has no effect on the direction of Allfunds i.e., Allfunds and AMS Small go up and down completely randomly.
Pair Corralation between Allfunds and AMS Small
Assuming the 90 days trading horizon Allfunds Group is expected to under-perform the AMS Small. In addition to that, Allfunds is 1.91 times more volatile than AMS Small Cap. It trades about -0.2 of its total potential returns per unit of risk. AMS Small Cap is currently generating about -0.26 per unit of volatility. If you would invest 123,784 in AMS Small Cap on August 29, 2024 and sell it today you would lose (7,179) from holding AMS Small Cap or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allfunds Group vs. AMS Small Cap
Performance |
| Timeline |
Allfunds and AMS Small Volatility Contrast
Predicted Return Density |
| Returns |
Allfunds Group
Pair trading matchups for Allfunds
AMS Small Cap
Pair trading matchups for AMS Small
Pair Trading with Allfunds and AMS Small
The main advantage of trading using opposite Allfunds and AMS Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allfunds position performs unexpectedly, AMS Small 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 AMS Small will offset losses from the drop in AMS Small's long position.| Allfunds vs. Instalco Intressenter AB | Allfunds vs. Euronext NV | Allfunds vs. Linea Directa Aseguradora | Allfunds vs. Pershing Square Holdings |
| AMS Small vs. SBM Offshore NV | AMS Small vs. AMG Advanced Metallurgical | AMS Small vs. BE Semiconductor Industries | AMS Small vs. Flow Traders BV |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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