Correlation Between GM and Amg Managers
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Amg Managers Skyline, you can compare the effects of market volatilities on GM 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 GM with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Amg Managers.
Diversification Opportunities for GM and Amg Managers
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Amg is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Amg Managers Skyline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Skyline and GM 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 General Motors 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 Skyline has no effect on the direction of GM i.e., GM and Amg Managers go up and down completely randomly.
Pair Corralation between GM and Amg Managers
Allowing for the 90-day total investment horizon GM is expected to generate 1.32 times less return on investment than Amg Managers. In addition to that, GM is 1.65 times more volatile than Amg Managers Skyline. It trades about 0.17 of its total potential returns per unit of risk. Amg Managers Skyline is currently generating about 0.36 per unit of volatility. If you would invest 3,109 in Amg Managers Skyline on September 1, 2024 and sell it today you would earn a total of 444.00 from holding Amg Managers Skyline or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Amg Managers Skyline
Performance |
| Timeline |
| General Motors |
| Amg Managers Skyline |
GM and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Amg Managers
The main advantage of trading using opposite GM and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors and Amg Managers Skyline 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. American Beacon Bridgeway | Amg Managers vs. John Hancock Disciplined | Amg Managers vs. Large Cap Fund | Amg Managers 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |