Correlation Between Amg River and The Gold
Can any of the company-specific risk be diversified away by investing in both Amg River and The Gold 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 Gold 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 Gold Bullion, you can compare the effects of market volatilities on Amg River and The Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and The Gold.
Diversification Opportunities for Amg River and The Gold
Modest diversification
The 3 months correlation between Amg and The is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Amg River i.e., Amg River and The Gold go up and down completely randomly.
Pair Corralation between Amg River and The Gold
Assuming the 90 days horizon Amg River Road is expected to generate 0.95 times more return on investment than The Gold. However, Amg River Road is 1.05 times less risky than The Gold. It trades about 0.35 of its potential returns per unit of risk. The Gold Bullion is currently generating about -0.17 per unit of risk. If you would invest 1,020 in Amg River Road on August 30, 2024 and sell it today you would earn a total of 99.00 from holding Amg River Road or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amg River Road vs. The Gold Bullion
Performance |
| Timeline |
| Amg River Road |
| Gold Bullion |
Amg River and The Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and The Gold
The main advantage of trading using opposite Amg River and The Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, The Gold 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 Gold will offset losses from the drop in The Gold's long position.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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