Correlation Between Lind Capital and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Lind Capital and Amg 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 Lind Capital and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lind Capital Partners and Amg Managers Fairpointe, you can compare the effects of market volatilities on Lind Capital and Amg 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 Lind Capital with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lind Capital and Amg Managers.
Diversification Opportunities for Lind Capital and Amg Managers
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lind and Amg is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lind Capital Partners and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe and Lind 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 Lind Capital Partners are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Fairpointe has no effect on the direction of Lind Capital i.e., Lind Capital and Amg Managers go up and down completely randomly.
Pair Corralation between Lind Capital and Amg Managers
Assuming the 90 days horizon Lind Capital is expected to generate 2.54 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Lind Capital Partners is 3.38 times less risky than Amg Managers. It trades about 0.08 of its potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,954 in Amg Managers Fairpointe on September 4, 2024 and sell it today you would earn a total of 647.00 from holding Amg Managers Fairpointe or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lind Capital Partners vs. Amg Managers Fairpointe
Performance |
| Timeline |
| Lind Capital Partners |
| Amg Managers Fairpointe |
Lind Capital and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lind Capital and Amg Managers
The main advantage of trading using opposite Lind Capital and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lind Capital position performs unexpectedly, Amg 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard 500 Index | Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard Total Stock |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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