Correlation Between JZ Capital and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both JZ Capital and AMG Advanced 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 JZ Capital and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JZ Capital Partners and AMG Advanced Metallurgical, you can compare the effects of market volatilities on JZ Capital and AMG Advanced 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 JZ Capital with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of JZ Capital and AMG Advanced.
Diversification Opportunities for JZ Capital and AMG Advanced
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JZCP and AMG is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding JZ Capital Partners and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and JZ Capital 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 JZ Capital Partners are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of JZ Capital i.e., JZ Capital and AMG Advanced go up and down completely randomly.
Pair Corralation between JZ Capital and AMG Advanced
Assuming the 90 days trading horizon JZ Capital Partners is expected to generate 0.47 times more return on investment than AMG Advanced. However, JZ Capital Partners is 2.13 times less risky than AMG Advanced. It trades about 0.08 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.01 per unit of risk. If you would invest 19,300 in JZ Capital Partners on September 2, 2024 and sell it today you would earn a total of 1,200 from holding JZ Capital Partners or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JZ Capital Partners vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| JZ Capital Partners |
| AMG Advanced Metallu |
JZ Capital and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JZ Capital and AMG Advanced
The main advantage of trading using opposite JZ Capital and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JZ Capital position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| JZ Capital vs. SupplyMe Capital PLC | JZ Capital vs. SM Energy Co | JZ Capital vs. FuelCell Energy | JZ Capital vs. Grand Vision Media |
| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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