Correlation Between Amg Gwk and Amg Frontier
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Amg Frontier 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 Amg Gwk and Amg Frontier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Gwk E and Amg Frontier Small, you can compare the effects of market volatilities on Amg Gwk and Amg Frontier 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 Amg Gwk with a short position of Amg Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Amg Frontier.
Diversification Opportunities for Amg Gwk and Amg Frontier
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amg and Amg is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk E and Amg Frontier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Frontier Small and Amg Gwk 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 Amg Gwk E are associated (or correlated) with Amg Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Frontier Small has no effect on the direction of Amg Gwk i.e., Amg Gwk and Amg Frontier go up and down completely randomly.
Pair Corralation between Amg Gwk and Amg Frontier
Assuming the 90 days horizon Amg Gwk is expected to generate 5.63 times less return on investment than Amg Frontier. But when comparing it to its historical volatility, Amg Gwk E is 3.88 times less risky than Amg Frontier. It trades about 0.06 of its potential returns per unit of risk. Amg Frontier Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 820.00 in Amg Frontier Small on August 24, 2024 and sell it today you would earn a total of 275.00 from holding Amg Frontier Small or generate 33.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Amg Gwk E vs. Amg Frontier Small
Performance |
| Timeline |
| Amg Gwk E |
| Amg Frontier Small |
Amg Gwk and Amg Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Amg Frontier
The main advantage of trading using opposite Amg Gwk and Amg Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Amg Frontier 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 Frontier will offset losses from the drop in Amg Frontier's long position.| Amg Gwk vs. Vanguard Total Bond | Amg Gwk vs. Vanguard Total Bond | Amg Gwk vs. Vanguard Total Bond | Amg Gwk vs. Vanguard Total Bond |
| Amg Frontier vs. Vanguard Small Cap Growth | Amg Frontier vs. Vanguard Small Cap Growth | Amg Frontier vs. Vanguard Explorer Fund | Amg Frontier vs. Vanguard Explorer Fund |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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