Correlation Between AMG Advanced and AEX Amsterdam
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and AEX Amsterdam 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 Advanced and AEX Amsterdam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and AEX Amsterdam Index, you can compare the effects of market volatilities on AMG Advanced and AEX Amsterdam 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 Advanced with a short position of AEX Amsterdam. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and AEX Amsterdam.
Diversification Opportunities for AMG Advanced and AEX Amsterdam
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMG and AEX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and AEX Amsterdam Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEX Amsterdam Index and AMG Advanced 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 Advanced Metallurgical are associated (or correlated) with AEX Amsterdam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEX Amsterdam Index has no effect on the direction of AMG Advanced i.e., AMG Advanced and AEX Amsterdam go up and down completely randomly.
Pair Corralation between AMG Advanced and AEX Amsterdam
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the AEX Amsterdam. In addition to that, AMG Advanced is 2.42 times more volatile than AEX Amsterdam Index. It trades about -0.15 of its total potential returns per unit of risk. AEX Amsterdam Index is currently generating about 0.06 per unit of volatility. If you would invest 87,951 in AEX Amsterdam Index on September 4, 2024 and sell it today you would earn a total of 814.00 from holding AEX Amsterdam Index or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. AEX Amsterdam Index
Performance |
| Timeline |
AMG Advanced and AEX Amsterdam Volatility Contrast
Predicted Return Density |
| Returns |
AMG Advanced Metallurgical
Pair trading matchups for AMG Advanced
AEX Amsterdam Index
Pair trading matchups for AEX Amsterdam
Pair Trading with AMG Advanced and AEX Amsterdam
The main advantage of trading using opposite AMG Advanced and AEX Amsterdam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, AEX Amsterdam 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 AEX Amsterdam will offset losses from the drop in AEX Amsterdam's long position.| AMG Advanced vs. BE Semiconductor Industries | AMG Advanced vs. TKH Group NV | AMG Advanced vs. OCI NV | AMG Advanced vs. Aalberts Industries NV |
| AEX Amsterdam vs. Allfunds Group | AEX Amsterdam vs. Accsys Technologies | AEX Amsterdam vs. Reinet Investments SCA | AEX Amsterdam vs. Vastned Retail NV |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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