Correlation Between Galapagos and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Galapagos 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 Galapagos and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galapagos NV and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Galapagos 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 Galapagos with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galapagos and AMG Advanced.
Diversification Opportunities for Galapagos and AMG Advanced
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galapagos and AMG is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Galapagos 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 Galapagos 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 Galapagos 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 Galapagos i.e., Galapagos and AMG Advanced go up and down completely randomly.
Pair Corralation between Galapagos and AMG Advanced
Assuming the 90 days trading horizon Galapagos NV is expected to generate 0.7 times more return on investment than AMG Advanced. However, Galapagos NV is 1.43 times less risky than AMG Advanced. It trades about -0.03 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.05 per unit of risk. If you would invest 3,660 in Galapagos NV on August 27, 2024 and sell it today you would lose (1,122) from holding Galapagos NV or give up 30.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galapagos NV vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Galapagos NV |
| AMG Advanced Metallu |
Galapagos and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galapagos and AMG Advanced
The main advantage of trading using opposite Galapagos and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galapagos 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.| Galapagos vs. Argen X | Galapagos vs. Pharming Group NV | Galapagos vs. Barco NV | Galapagos vs. Biocartis Group NV |
| AMG Advanced vs. BE Semiconductor Industries | AMG Advanced vs. TKH Group NV | AMG Advanced vs. OCI NV | AMG Advanced vs. Aalberts Industries 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |