Correlation Between Litigation Capital and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Litigation 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 Litigation 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 Litigation Capital Management and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Litigation 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 Litigation Capital with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and AMG Advanced.
Diversification Opportunities for Litigation Capital and AMG Advanced
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Litigation and AMG is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management 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 Litigation 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 Litigation Capital Management 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 Litigation Capital i.e., Litigation Capital and AMG Advanced go up and down completely randomly.
Pair Corralation between Litigation Capital and AMG Advanced
Assuming the 90 days trading horizon Litigation Capital Management is expected to generate 0.45 times more return on investment than AMG Advanced. However, Litigation Capital Management is 2.23 times less risky than AMG Advanced. It trades about 0.18 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.19 per unit of risk. If you would invest 11,200 in Litigation Capital Management on August 28, 2024 and sell it today you would earn a total of 375.00 from holding Litigation Capital Management or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Litigation Capital |
| AMG Advanced Metallu |
Litigation Capital and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and AMG Advanced
The main advantage of trading using opposite Litigation Capital and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation 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.| Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. Oncimmune Holdings plc | Litigation Capital vs. Invesco Health Care | Litigation Capital vs. Coor Service Management |
| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Toyota Motor Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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