Correlation Between Aston Montag and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Aston Montag and Amg Southernsun 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 Aston Montag and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Montag Caldwell and Amg Southernsun Equity, you can compare the effects of market volatilities on Aston Montag and Amg Southernsun 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 Aston Montag with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Montag and Amg Southernsun.
Diversification Opportunities for Aston Montag and Amg Southernsun
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aston and Amg is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aston Montag Caldwell and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity and Aston Montag 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 Aston Montag Caldwell are associated (or correlated) with Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Aston Montag i.e., Aston Montag and Amg Southernsun go up and down completely randomly.
Pair Corralation between Aston Montag and Amg Southernsun
Assuming the 90 days horizon Aston Montag is expected to generate 1.07 times less return on investment than Amg Southernsun. But when comparing it to its historical volatility, Aston Montag Caldwell is 1.12 times less risky than Amg Southernsun. It trades about 0.08 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,326 in Amg Southernsun Equity on September 3, 2024 and sell it today you would earn a total of 246.00 from holding Amg Southernsun Equity or generate 18.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Montag Caldwell vs. Amg Southernsun Equity
Performance |
| Timeline |
| Aston Montag Caldwell |
| Amg Southernsun Equity |
Aston Montag and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Montag and Amg Southernsun
The main advantage of trading using opposite Aston Montag and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Montag position performs unexpectedly, Amg Southernsun 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 Southernsun will offset losses from the drop in Amg Southernsun's long position.| Aston Montag vs. Credit Suisse Modity | Aston Montag vs. Selected American Shares | Aston Montag vs. Causeway International Value | Aston Montag vs. Marsico Focus Fund |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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