Correlation Between Amg River and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Amg River and Transamerica Financial 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 Transamerica Financial 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 Transamerica Financial Life, you can compare the effects of market volatilities on Amg River and Transamerica Financial 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 Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Transamerica Financial.
Diversification Opportunities for Amg River and Transamerica Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Transamerica is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Amg River i.e., Amg River and Transamerica Financial go up and down completely randomly.
Pair Corralation between Amg River and Transamerica Financial
Assuming the 90 days horizon Amg River is expected to generate 1.22 times less return on investment than Transamerica Financial. In addition to that, Amg River is 1.26 times more volatile than Transamerica Financial Life. It trades about 0.03 of its total potential returns per unit of risk. Transamerica Financial Life is currently generating about 0.04 per unit of volatility. If you would invest 984.00 in Transamerica Financial Life on September 24, 2024 and sell it today you would earn a total of 182.00 from holding Transamerica Financial Life or generate 18.5% 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. Transamerica Financial Life
Performance |
| Timeline |
| Amg River Road |
| Transamerica Financial |
Amg River and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Transamerica Financial
The main advantage of trading using opposite Amg River and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Transamerica Financial 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Amg River vs. Alger Smallcap Growth | Amg River vs. Deutsche Global Real | Amg River vs. Amg River Road | Amg River vs. Delaware Value Fund |
| Transamerica Financial vs. Shelton Emerging Markets | Transamerica Financial vs. Origin Emerging Markets | Transamerica Financial vs. Ashmore Emerging Markets | Transamerica Financial vs. T Rowe Price |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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