Correlation Between Encore Capital and Amsted
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By analyzing existing cross correlation between Encore Capital Group and Amsted Industries 4625, you can compare the effects of market volatilities on Encore Capital and Amsted 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 Encore Capital with a short position of Amsted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Amsted.
Diversification Opportunities for Encore Capital and Amsted
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Encore and Amsted is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Amsted Industries 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amsted Industries 4625 and Encore Capital 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 Encore Capital Group are associated (or correlated) with Amsted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amsted Industries 4625 has no effect on the direction of Encore Capital i.e., Encore Capital and Amsted go up and down completely randomly.
Pair Corralation between Encore Capital and Amsted
Given the investment horizon of 90 days Encore Capital Group is expected to generate 3.56 times more return on investment than Amsted. However, Encore Capital is 3.56 times more volatile than Amsted Industries 4625. It trades about 0.02 of its potential returns per unit of risk. Amsted Industries 4625 is currently generating about 0.02 per unit of risk. If you would invest 4,594 in Encore Capital Group on September 4, 2024 and sell it today you would earn a total of 241.00 from holding Encore Capital Group or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.75% |
| Values | Daily Returns |
Encore Capital Group vs. Amsted Industries 4625
Performance |
| Timeline |
| Encore Capital Group |
| Amsted Industries 4625 |
Encore Capital and Amsted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Amsted
The main advantage of trading using opposite Encore Capital and Amsted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, Amsted 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 Amsted will offset losses from the drop in Amsted's long position.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
| Amsted vs. Summit Materials | Amsted vs. KeyCorp | Amsted vs. Chester Mining | Amsted vs. Encore Capital Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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