Correlation Between Amg River and Cullen Small
Can any of the company-specific risk be diversified away by investing in both Amg River and Cullen Small 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 Cullen Small 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 Cullen Small Cap, you can compare the effects of market volatilities on Amg River and Cullen Small 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 Cullen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Cullen Small.
Diversification Opportunities for Amg River and Cullen Small
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMG and Cullen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Cullen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Small Cap 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 Cullen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Small Cap has no effect on the direction of Amg River i.e., Amg River and Cullen Small go up and down completely randomly.
Pair Corralation between Amg River and Cullen Small
Assuming the 90 days horizon Amg River Road is expected to generate 0.71 times more return on investment than Cullen Small. However, Amg River Road is 1.42 times less risky than Cullen Small. It trades about 0.25 of its potential returns per unit of risk. Cullen Small Cap is currently generating about 0.1 per unit of risk. If you would invest 1,511 in Amg River Road on September 5, 2024 and sell it today you would earn a total of 268.00 from holding Amg River Road or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Amg River Road vs. Cullen Small Cap
Performance |
| Timeline |
| Amg River Road |
| Cullen Small Cap |
Amg River and Cullen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Cullen Small
The main advantage of trading using opposite Amg River and Cullen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Cullen Small 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 Cullen Small will offset losses from the drop in Cullen Small'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 |
| Cullen Small vs. Vanguard Small Cap Value | Cullen Small vs. Mutual Of America | Cullen Small vs. Ultramid Cap Profund Ultramid Cap | Cullen Small vs. Amg River Road |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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