Correlation Between AMG Advanced and AFC Ajax
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and AFC Ajax 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 AFC Ajax 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 AFC Ajax NV, you can compare the effects of market volatilities on AMG Advanced and AFC Ajax 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 AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and AFC Ajax.
Diversification Opportunities for AMG Advanced and AFC Ajax
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and AFC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV 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 AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of AMG Advanced i.e., AMG Advanced and AFC Ajax go up and down completely randomly.
Pair Corralation between AMG Advanced and AFC Ajax
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the AFC Ajax. In addition to that, AMG Advanced is 3.0 times more volatile than AFC Ajax NV. It trades about -0.11 of its total potential returns per unit of risk. AFC Ajax NV is currently generating about -0.02 per unit of volatility. If you would invest 1,040 in AFC Ajax NV on September 3, 2024 and sell it today you would lose (35.00) from holding AFC Ajax NV or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. AFC Ajax NV
Performance |
| Timeline |
| AMG Advanced Metallu |
| AFC Ajax NV |
AMG Advanced and AFC Ajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and AFC Ajax
The main advantage of trading using opposite AMG Advanced and AFC Ajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, AFC Ajax 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 AFC Ajax will offset losses from the drop in AFC Ajax'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 |
| AFC Ajax vs. Adyen NV | AFC Ajax vs. ASML Holding NV | AFC Ajax vs. ASM International NV | AFC Ajax vs. IMCD 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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