Correlation Between Large Cap and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Large Cap and Amg Gwk 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 Large Cap and Amg Gwk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Fund and Amg Gwk Small, you can compare the effects of market volatilities on Large Cap and Amg Gwk 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 Large Cap with a short position of Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Amg Gwk.
Diversification Opportunities for Large Cap and Amg Gwk
Very poor diversification
The 3 months correlation between Large and Amg is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Fund and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small and Large Cap 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 Large Cap Fund are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of Large Cap i.e., Large Cap and Amg Gwk go up and down completely randomly.
Pair Corralation between Large Cap and Amg Gwk
Assuming the 90 days horizon Large Cap is expected to generate 1.28 times less return on investment than Amg Gwk. But when comparing it to its historical volatility, Large Cap Fund is 1.29 times less risky than Amg Gwk. It trades about 0.07 of its potential returns per unit of risk. Amg Gwk Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,788 in Amg Gwk Small on September 2, 2024 and sell it today you would earn a total of 806.00 from holding Amg Gwk Small or generate 28.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Fund vs. Amg Gwk Small
Performance |
| Timeline |
| Large Cap Fund |
| Amg Gwk Small |
Large Cap and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Amg Gwk
The main advantage of trading using opposite Large Cap and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap position performs unexpectedly, Amg Gwk 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 Gwk will offset losses from the drop in Amg Gwk's long position.| Large Cap vs. Wasatch Large Cap | Large Cap vs. Loomis Sayles Bond | Large Cap vs. Harbor International Fund | Large Cap vs. Equity Series Class |
| Amg Gwk vs. American Beacon Bridgeway | Amg Gwk vs. John Hancock Disciplined | Amg Gwk vs. Large Cap Fund | Amg Gwk vs. Baird E Plus |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |