Correlation Between Amg Gwk and American Growth
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and American Growth 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 American Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Gwk Smallmid and American Growth Fund, you can compare the effects of market volatilities on Amg Gwk and American Growth 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 American Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and American Growth.
Diversification Opportunities for Amg Gwk and American Growth
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and American is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Smallmid and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth 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 Smallmid are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Amg Gwk i.e., Amg Gwk and American Growth go up and down completely randomly.
Pair Corralation between Amg Gwk and American Growth
Assuming the 90 days horizon Amg Gwk is expected to generate 1.2 times less return on investment than American Growth. In addition to that, Amg Gwk is 1.11 times more volatile than American Growth Fund. It trades about 0.05 of its total potential returns per unit of risk. American Growth Fund is currently generating about 0.07 per unit of volatility. If you would invest 644.00 in American Growth Fund on September 3, 2024 and sell it today you would earn a total of 222.00 from holding American Growth Fund or generate 34.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Smallmid vs. American Growth Fund
Performance |
| Timeline |
| Amg Gwk Smallmid |
| American Growth |
Amg Gwk and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and American Growth
The main advantage of trading using opposite Amg Gwk and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, American Growth 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 American Growth will offset losses from the drop in American Growth's long position.| Amg Gwk vs. Sei Daily Income | Amg Gwk vs. Bbh Intermediate Municipal | Amg Gwk vs. Rbc Microcap Value | Amg Gwk vs. Acm Dynamic Opportunity |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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