Correlation Between Amg Gwk and Guidemark Smallmid
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Guidemark Smallmid 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 Gwk and Guidemark Smallmid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Gwk Small and Guidemark Smallmid Cap, you can compare the effects of market volatilities on Amg Gwk and Guidemark Smallmid 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 Gwk with a short position of Guidemark Smallmid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Guidemark Smallmid.
Diversification Opportunities for Amg Gwk and Guidemark Smallmid
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Guidemark is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Small and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap and Amg Gwk 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 Gwk Small are associated (or correlated) with Guidemark Smallmid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Amg Gwk i.e., Amg Gwk and Guidemark Smallmid go up and down completely randomly.
Pair Corralation between Amg Gwk and Guidemark Smallmid
Assuming the 90 days horizon Amg Gwk Small is expected to generate 0.58 times more return on investment than Guidemark Smallmid. However, Amg Gwk Small is 1.73 times less risky than Guidemark Smallmid. It trades about -0.33 of its potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about -0.29 per unit of risk. If you would invest 3,542 in Amg Gwk Small on October 9, 2024 and sell it today you would lose (302.00) from holding Amg Gwk Small or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Small vs. Guidemark Smallmid Cap
Performance |
| Timeline |
| Amg Gwk Small |
| Guidemark Smallmid Cap |
Amg Gwk and Guidemark Smallmid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Guidemark Smallmid
The main advantage of trading using opposite Amg Gwk and Guidemark Smallmid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Guidemark Smallmid 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 Guidemark Smallmid will offset losses from the drop in Guidemark Smallmid's long position.| Amg Gwk vs. Amg Gwk Small | Amg Gwk vs. Aberdeen Small Cap | Amg Gwk vs. Poplar Forest Partners | Amg Gwk vs. Calvert Small Cap |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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