Correlation Between Amg River and The Value
Can any of the company-specific risk be diversified away by investing in both Amg River and The Value 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 River and The Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and The Value Fund, you can compare the effects of market volatilities on Amg River and The Value 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 River with a short position of The Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and The Value.
Diversification Opportunities for Amg River and The Value
Almost no diversification
The 3 months correlation between Amg and The is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and The Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund and Amg River 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 River Road are associated (or correlated) with The Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund has no effect on the direction of Amg River i.e., Amg River and The Value go up and down completely randomly.
Pair Corralation between Amg River and The Value
Assuming the 90 days horizon Amg River Road is expected to generate 0.96 times more return on investment than The Value. However, Amg River Road is 1.04 times less risky than The Value. It trades about 0.19 of its potential returns per unit of risk. The Value Fund is currently generating about 0.14 per unit of risk. If you would invest 968.00 in Amg River Road on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Amg River Road or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. The Value Fund
Performance |
| Timeline |
| Amg River Road |
| Value Fund |
Amg River and The Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and The Value
The main advantage of trading using opposite Amg River and The Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, The Value 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 The Value will offset losses from the drop in The Value's long position.| Amg River vs. Pear Tree Polaris | Amg River vs. Artisan Global Value | Amg River vs. Amg River Road | Amg River vs. Tcw Relative Value |
| The Value vs. Cullen High Dividend | The Value vs. Lazard Global Listed | The Value vs. The Bond Fund | The Value vs. Aquagold International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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