Correlation Between Amg Managers and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Amg Southernsun 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 Amg Southernsun 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 Amg Southernsun Small, you can compare the effects of market volatilities on Amg Managers and Amg Southernsun 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 Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Amg Southernsun.
Diversification Opportunities for Amg Managers and Amg Southernsun
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and Amg is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Brandywine and Amg Southernsun Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Small 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 Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Small has no effect on the direction of Amg Managers i.e., Amg Managers and Amg Southernsun go up and down completely randomly.
Pair Corralation between Amg Managers and Amg Southernsun
Assuming the 90 days horizon Amg Managers Brandywine is expected to generate 0.33 times more return on investment than Amg Southernsun. However, Amg Managers Brandywine is 3.05 times less risky than Amg Southernsun. It trades about -0.02 of its potential returns per unit of risk. Amg Southernsun Small is currently generating about -0.13 per unit of risk. If you would invest 3,965 in Amg Managers Brandywine on October 20, 2024 and sell it today you would lose (36.00) from holding Amg Managers Brandywine or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Brandywine vs. Amg Southernsun Small
Performance |
| Timeline |
| Amg Managers Brandywine |
| Amg Southernsun Small |
Amg Managers and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Amg Southernsun
The main advantage of trading using opposite Amg Managers and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.| Amg Managers vs. Goldman Sachs Technology | Amg Managers vs. Global Technology Portfolio | Amg Managers vs. Hennessy Technology Fund | Amg Managers vs. Vanguard Information Technology |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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