Correlation Between CM NV and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both CM NV and AMG Advanced 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 CM NV and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM NV and AMG Advanced Metallurgical, you can compare the effects of market volatilities on CM NV and AMG Advanced 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 CM NV with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM NV and AMG Advanced.
Diversification Opportunities for CM NV and AMG Advanced
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CMCOM and AMG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CM NV and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and CM NV 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 CM NV are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of CM NV i.e., CM NV and AMG Advanced go up and down completely randomly.
Pair Corralation between CM NV and AMG Advanced
Assuming the 90 days trading horizon CM NV is expected to under-perform the AMG Advanced. But the stock apears to be less risky and, when comparing its historical volatility, CM NV is 1.49 times less risky than AMG Advanced. The stock trades about -0.41 of its potential returns per unit of risk. The AMG Advanced Metallurgical is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 1,593 in AMG Advanced Metallurgical on August 30, 2024 and sell it today you would lose (164.00) from holding AMG Advanced Metallurgical or give up 10.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM NV vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| CM NV |
| AMG Advanced Metallu |
CM NV and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM NV and AMG Advanced
The main advantage of trading using opposite CM NV and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM NV position performs unexpectedly, AMG Advanced 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 Advanced will offset losses from the drop in AMG Advanced's long position.| CM NV vs. Just Eat Takeaway | CM NV vs. Alfen Beheer BV | CM NV vs. BE Semiconductor Industries | CM NV vs. Basic Fit NV |
| AMG Advanced vs. NN Group NV | AMG Advanced vs. Koninklijke Vopak NV | AMG Advanced vs. BE Semiconductor Industries | AMG Advanced vs. SBM Offshore NV |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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