Correlation Between Amg Managers and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Transamerica Intermediate 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 Managers and Transamerica Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Managers Brandywine and Transamerica Intermediate Muni, you can compare the effects of market volatilities on Amg Managers and Transamerica Intermediate 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 Managers with a short position of Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Transamerica Intermediate.
Diversification Opportunities for Amg Managers and Transamerica Intermediate
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amg and Transamerica is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Brandywine and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate and Amg Managers 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 Managers Brandywine are associated (or correlated) with Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Amg Managers i.e., Amg Managers and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Amg Managers and Transamerica Intermediate
Assuming the 90 days horizon Amg Managers Brandywine is expected to generate 1.98 times more return on investment than Transamerica Intermediate. However, Amg Managers is 1.98 times more volatile than Transamerica Intermediate Muni. It trades about 0.25 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.09 per unit of risk. If you would invest 3,876 in Amg Managers Brandywine on October 25, 2024 and sell it today you would earn a total of 82.00 from holding Amg Managers Brandywine or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Brandywine vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Amg Managers Brandywine |
| Transamerica Intermediate |
Amg Managers and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Transamerica Intermediate
The main advantage of trading using opposite Amg Managers and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Transamerica Intermediate 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 Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Amg Managers vs. Columbia Global Technology | Amg Managers vs. Science Technology Fund | Amg Managers vs. Fidelity Advisor Technology | Amg Managers vs. Blackrock Science Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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