Correlation Between Credit Enhanced and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Credit Enhanced 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 Credit Enhanced and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Enhanced Corts and Affiliated Managers Group, you can compare the effects of market volatilities on Credit Enhanced 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 Credit Enhanced with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Enhanced and Affiliated Managers.
Diversification Opportunities for Credit Enhanced and Affiliated Managers
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Affiliated is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Credit Enhanced Corts and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Credit Enhanced 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 Credit Enhanced Corts 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 Credit Enhanced i.e., Credit Enhanced and Affiliated Managers go up and down completely randomly.
Pair Corralation between Credit Enhanced and Affiliated Managers
Considering the 90-day investment horizon Credit Enhanced Corts is expected to generate 1.83 times more return on investment than Affiliated Managers. However, Credit Enhanced is 1.83 times more volatile than Affiliated Managers Group. It trades about 0.02 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.03 per unit of risk. If you would invest 2,362 in Credit Enhanced Corts on August 26, 2024 and sell it today you would earn a total of 323.00 from holding Credit Enhanced Corts or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.99% |
| Values | Daily Returns |
Credit Enhanced Corts vs. Affiliated Managers Group
Performance |
| Timeline |
| Credit Enhanced Corts |
| Affiliated Managers |
Credit Enhanced and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Enhanced and Affiliated Managers
The main advantage of trading using opposite Credit Enhanced and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Enhanced 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.| Credit Enhanced vs. DBA Sempra 5750 | Credit Enhanced vs. CMS Energy Corp | Credit Enhanced vs. American Financial Group | Credit Enhanced vs. Maiden Holdings North |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |