Correlation Between Amg River and Cambiar International
Can any of the company-specific risk be diversified away by investing in both Amg River and Cambiar International 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 Cambiar International 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 Cambiar International Equity, you can compare the effects of market volatilities on Amg River and Cambiar International 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 Cambiar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Cambiar International.
Diversification Opportunities for Amg River and Cambiar International
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amg and Cambiar is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Cambiar International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar International 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 Cambiar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar International has no effect on the direction of Amg River i.e., Amg River and Cambiar International go up and down completely randomly.
Pair Corralation between Amg River and Cambiar International
Assuming the 90 days horizon Amg River Road is expected to generate 1.05 times more return on investment than Cambiar International. However, Amg River is 1.05 times more volatile than Cambiar International Equity. It trades about 0.13 of its potential returns per unit of risk. Cambiar International Equity is currently generating about 0.08 per unit of risk. If you would invest 1,243 in Amg River Road on September 2, 2024 and sell it today you would earn a total of 345.00 from holding Amg River Road or generate 27.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. Cambiar International Equity
Performance |
| Timeline |
| Amg River Road |
| Cambiar International |
Amg River and Cambiar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Cambiar International
The main advantage of trading using opposite Amg River and Cambiar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Cambiar International 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 Cambiar International will offset losses from the drop in Cambiar International's long position.| Amg River vs. Champlain Mid Cap | Amg River vs. Johcm Emerging Markets | Amg River vs. Walden Smid Cap | Amg River vs. American Beacon Stephens |
| Cambiar International vs. Causeway Emerging Markets | Cambiar International vs. Cambiar Small Cap | Cambiar International vs. Pimco Short Term Fund | Cambiar International vs. Cambiar Opportunity Fund |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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