Correlation Between Amg Fq and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Amg Fq 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 Fq 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 Fq Long Short and Amg Southernsun Small, you can compare the effects of market volatilities on Amg Fq 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 Fq with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Fq and Amg Southernsun.
Diversification Opportunities for Amg Fq and Amg Southernsun
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Amg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Amg Fq Long Short 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 Fq 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 Fq Long Short 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 Fq i.e., Amg Fq and Amg Southernsun go up and down completely randomly.
Pair Corralation between Amg Fq and Amg Southernsun
Assuming the 90 days horizon Amg Fq Long Short is expected to generate 0.53 times more return on investment than Amg Southernsun. However, Amg Fq Long Short is 1.89 times less risky than Amg Southernsun. It trades about 0.12 of its potential returns per unit of risk. Amg Southernsun Small is currently generating about 0.01 per unit of risk. If you would invest 1,413 in Amg Fq Long Short on August 30, 2024 and sell it today you would earn a total of 781.00 from holding Amg Fq Long Short or generate 55.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Fq Long Short vs. Amg Southernsun Small
Performance |
| Timeline |
| Amg Fq Long |
| Amg Southernsun Small |
Amg Fq and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Fq and Amg Southernsun
The main advantage of trading using opposite Amg Fq and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Fq 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.The idea behind Amg Fq Long Short and Amg Southernsun Small 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 Southernsun vs. Kinetics Global Fund | Amg Southernsun vs. Ms Global Fixed | Amg Southernsun vs. Scharf Global Opportunity | Amg Southernsun vs. T Rowe Price |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |