Correlation Between Amg River and American Funds
Can any of the company-specific risk be diversified away by investing in both Amg River and American Funds 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 American Funds 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 American Funds Capital, you can compare the effects of market volatilities on Amg River and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and American Funds.
Diversification Opportunities for Amg River and American Funds
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amg and American is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and American Funds Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Capital 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Capital has no effect on the direction of Amg River i.e., Amg River and American Funds go up and down completely randomly.
Pair Corralation between Amg River and American Funds
Assuming the 90 days horizon Amg River Road is expected to generate 2.39 times more return on investment than American Funds. However, Amg River is 2.39 times more volatile than American Funds Capital. It trades about 0.06 of its potential returns per unit of risk. American Funds Capital is currently generating about 0.02 per unit of risk. If you would invest 910.00 in Amg River Road on September 12, 2024 and sell it today you would earn a total of 189.00 from holding Amg River Road or generate 20.77% 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. American Funds Capital
Performance |
| Timeline |
| Amg River Road |
| American Funds Capital |
Amg River and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and American Funds
The main advantage of trading using opposite Amg River and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Amg River vs. Vanguard Small Cap Value | Amg River vs. Vanguard Small Cap Value | Amg River vs. Us Small Cap | Amg River vs. Us Targeted Value |
| American Funds vs. Dreyfus Government Cash | American Funds vs. Inverse Government Long | American Funds vs. Us Government Securities | American Funds vs. Schwab Government Money |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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