Correlation Between Structured Products and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Structured Products and Affiliated Managers 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 Structured Products and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Structured Products Corp and Affiliated Managers Group, you can compare the effects of market volatilities on Structured Products and Affiliated Managers 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 Structured Products with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structured Products and Affiliated Managers.
Diversification Opportunities for Structured Products and Affiliated Managers
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Structured and Affiliated is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Structured Products Corp and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Structured Products 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 Structured Products Corp are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Structured Products i.e., Structured Products and Affiliated Managers go up and down completely randomly.
Pair Corralation between Structured Products and Affiliated Managers
Considering the 90-day investment horizon Structured Products Corp is expected to generate 2.07 times more return on investment than Affiliated Managers. However, Structured Products is 2.07 times more volatile than Affiliated Managers Group. It trades about -0.09 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about -0.33 per unit of risk. If you would invest 2,970 in Structured Products Corp on August 30, 2024 and sell it today you would lose (92.00) from holding Structured Products Corp or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Structured Products Corp vs. Affiliated Managers Group
Performance |
| Timeline |
| Structured Products Corp |
| Affiliated Managers |
Structured Products and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Structured Products and Affiliated Managers
The main advantage of trading using opposite Structured Products and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Structured Products position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| Structured Products vs. Credit Enhanced Corts | Structured Products vs. Strats Trust Cellular | Structured Products vs. Goldman Sachs Capital | Structured Products vs. STRATS SM Trust |
| Affiliated Managers vs. DBA Sempra 5750 | Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. American Financial Group | Affiliated Managers vs. National Rural Utilities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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