Correlation Between Ford and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Ford and Amg Managers 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 Ford and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Amg Managers Brandywine, you can compare the effects of market volatilities on Ford and Amg Managers 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 Ford with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Amg Managers.
Diversification Opportunities for Ford and Amg Managers
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Amg is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Amg Managers Brandywine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Brandywine and Ford 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 Ford Motor are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Brandywine has no effect on the direction of Ford i.e., Ford and Amg Managers go up and down completely randomly.
Pair Corralation between Ford and Amg Managers
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Amg Managers. In addition to that, Ford is 4.78 times more volatile than Amg Managers Brandywine. It trades about 0.0 of its total potential returns per unit of risk. Amg Managers Brandywine is currently generating about 0.09 per unit of volatility. If you would invest 3,549 in Amg Managers Brandywine on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Amg Managers Brandywine or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Amg Managers Brandywine
Performance |
| Timeline |
| Ford Motor |
| Amg Managers Brandywine |
Ford and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Amg Managers
The main advantage of trading using opposite Ford and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Amg Managers 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 Managers will offset losses from the drop in Amg Managers' long position.The idea behind Ford Motor and Amg Managers Brandywine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amg Managers vs. Diamond Hill Long Short | Amg Managers vs. Pimco Rae Worldwide | Amg Managers vs. SCOR PK | Amg Managers vs. Morningstar Unconstrained Allocation |
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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