Correlation Between Amg Gwk and Aston Montag
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Aston Montag 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 Montag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Gwk Municipal and Aston Montag Caldwell, you can compare the effects of market volatilities on Amg Gwk and Aston Montag 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 Montag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Aston Montag.
Diversification Opportunities for Amg Gwk and Aston Montag
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amg and Aston is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Municipal and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell 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 Municipal are associated (or correlated) with Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of Amg Gwk i.e., Amg Gwk and Aston Montag go up and down completely randomly.
Pair Corralation between Amg Gwk and Aston Montag
Assuming the 90 days horizon Amg Gwk is expected to generate 7.76 times less return on investment than Aston Montag. But when comparing it to its historical volatility, Amg Gwk Municipal is 4.36 times less risky than Aston Montag. It trades about 0.05 of its potential returns per unit of risk. Aston Montag Caldwell is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 913.00 in Aston Montag Caldwell on August 31, 2024 and sell it today you would earn a total of 453.00 from holding Aston Montag Caldwell or generate 49.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Municipal vs. Aston Montag Caldwell
Performance |
| Timeline |
| Amg Gwk Municipal |
| Aston Montag Caldwell |
Amg Gwk and Aston Montag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Aston Montag
The main advantage of trading using opposite Amg Gwk and Aston Montag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Aston Montag 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 Montag will offset losses from the drop in Aston Montag's long position.| Amg Gwk vs. Tekla Healthcare Opportunities | Amg Gwk vs. Live Oak Health | Amg Gwk vs. Hartford Healthcare Hls | Amg Gwk vs. Eventide Healthcare Life |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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