Correlation Between Amg Gwk and Aston/crosswind Small
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Aston/crosswind Small 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 Aston/crosswind Small 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 Astoncrosswind Small Cap, you can compare the effects of market volatilities on Amg Gwk and Aston/crosswind Small 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 Aston/crosswind Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Aston/crosswind Small.
Diversification Opportunities for Amg Gwk and Aston/crosswind Small
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Aston/Crosswind is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Small and Astoncrosswind Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoncrosswind Small 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 Aston/crosswind Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoncrosswind Small Cap has no effect on the direction of Amg Gwk i.e., Amg Gwk and Aston/crosswind Small go up and down completely randomly.
Pair Corralation between Amg Gwk and Aston/crosswind Small
Assuming the 90 days horizon Amg Gwk Small is expected to generate 1.02 times more return on investment than Aston/crosswind Small. However, Amg Gwk is 1.02 times more volatile than Astoncrosswind Small Cap. It trades about -0.29 of its potential returns per unit of risk. Astoncrosswind Small Cap is currently generating about -0.34 per unit of risk. If you would invest 3,451 in Amg Gwk Small on December 3, 2024 and sell it today you would lose (169.00) from holding Amg Gwk Small or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Small vs. Astoncrosswind Small Cap
Performance |
| Timeline |
| Amg Gwk Small |
| Astoncrosswind Small Cap |
Amg Gwk and Aston/crosswind Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Aston/crosswind Small
The main advantage of trading using opposite Amg Gwk and Aston/crosswind Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Aston/crosswind Small 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 Aston/crosswind Small will offset losses from the drop in Aston/crosswind Small's long position.| Amg Gwk vs. Metropolitan West Ultra | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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