Correlation Between Amg Gwk and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Munications, you can compare the effects of market volatilities on Amg Gwk and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Columbia Seligman.
Diversification Opportunities for Amg Gwk and Columbia Seligman
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMG and Columbia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Small and Columbia Seligman Munications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman has no effect on the direction of Amg Gwk i.e., Amg Gwk and Columbia Seligman go up and down completely randomly.
Pair Corralation between Amg Gwk and Columbia Seligman
Assuming the 90 days horizon Amg Gwk Small is expected to generate 1.58 times more return on investment than Columbia Seligman. However, Amg Gwk is 1.58 times more volatile than Columbia Seligman Munications. It trades about 0.26 of its potential returns per unit of risk. Columbia Seligman Munications is currently generating about 0.25 per unit of risk. If you would invest 3,256 in Amg Gwk Small on August 28, 2024 and sell it today you would earn a total of 318.00 from holding Amg Gwk Small or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Small vs. Columbia Seligman Munications
Performance |
| Timeline |
| Amg Gwk Small |
| Columbia Seligman |
Amg Gwk and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Columbia Seligman
The main advantage of trading using opposite Amg Gwk and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman's long position.| Amg Gwk vs. American Beacon Bridgeway | Amg Gwk vs. John Hancock Disciplined | Amg Gwk vs. Large Cap Fund | Amg Gwk vs. Baird E Plus |
| Columbia Seligman vs. Columbia Seligman Munications | Columbia Seligman vs. Columbia Seligman Munications | Columbia Seligman vs. Columbia Seligman Global | Columbia Seligman vs. Columbia Seligman Global |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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