Correlation Between Amg River and American Mutual
Can any of the company-specific risk be diversified away by investing in both Amg River and American Mutual 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 Mutual 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 Mutual Fund, you can compare the effects of market volatilities on Amg River and American Mutual 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 Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and American Mutual.
Diversification Opportunities for Amg River and American Mutual
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMG and American is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Amg River i.e., Amg River and American Mutual go up and down completely randomly.
Pair Corralation between Amg River and American Mutual
Assuming the 90 days horizon Amg River is expected to generate 1.02 times less return on investment than American Mutual. In addition to that, Amg River is 1.61 times more volatile than American Mutual Fund. It trades about 0.08 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.12 per unit of volatility. If you would invest 4,668 in American Mutual Fund on September 4, 2024 and sell it today you would earn a total of 1,370 from holding American Mutual Fund or generate 29.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Amg River Road vs. American Mutual Fund
Performance |
| Timeline |
| Amg River Road |
| American Mutual |
Amg River and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and American Mutual
The main advantage of trading using opposite Amg River and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual'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 |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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