Correlation Between AMS Small and Allfunds
Can any of the company-specific risk be diversified away by investing in both AMS Small and Allfunds 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 AMS Small and Allfunds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMS Small Cap and Allfunds Group, you can compare the effects of market volatilities on AMS Small and Allfunds 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 AMS Small with a short position of Allfunds. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMS Small and Allfunds.
Diversification Opportunities for AMS Small and Allfunds
Average diversification
The 3 months correlation between AMS and Allfunds is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AMS Small Cap and Allfunds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allfunds Group and AMS Small 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 AMS Small Cap are associated (or correlated) with Allfunds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allfunds Group has no effect on the direction of AMS Small i.e., AMS Small and Allfunds go up and down completely randomly.
Pair Corralation between AMS Small and Allfunds
Assuming the 90 days trading horizon AMS Small Cap is expected to generate 0.52 times more return on investment than Allfunds. However, AMS Small Cap is 1.93 times less risky than Allfunds. It trades about -0.19 of its potential returns per unit of risk. Allfunds Group is currently generating about -0.13 per unit of risk. If you would invest 123,784 in AMS Small Cap on August 27, 2024 and sell it today you would lose (4,998) from holding AMS Small Cap or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMS Small Cap vs. Allfunds Group
Performance |
| Timeline |
AMS Small and Allfunds Volatility Contrast
Predicted Return Density |
| Returns |
AMS Small Cap
Pair trading matchups for AMS Small
Allfunds Group
Pair trading matchups for Allfunds
Pair Trading with AMS Small and Allfunds
The main advantage of trading using opposite AMS Small and Allfunds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMS Small position performs unexpectedly, Allfunds 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 Allfunds will offset losses from the drop in Allfunds' long position.| AMS Small vs. Reinet Investments SCA | AMS Small vs. Sligro Food Group | AMS Small vs. Allfunds Group | AMS Small vs. AMG Advanced Metallurgical |
| Allfunds vs. Instalco Intressenter AB | Allfunds vs. Euronext NV | Allfunds vs. Linea Directa Aseguradora | Allfunds vs. Pershing Square Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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