Correlation Between Affiliated Managers and Structured Products
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and Structured Products 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 Affiliated Managers and Structured Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and Structured Products Corp, you can compare the effects of market volatilities on Affiliated Managers and Structured Products 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 Affiliated Managers with a short position of Structured Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Structured Products.
Diversification Opportunities for Affiliated Managers and Structured Products
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Affiliated and Structured is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Structured Products Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structured Products Corp and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with Structured Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structured Products Corp has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Structured Products go up and down completely randomly.
Pair Corralation between Affiliated Managers and Structured Products
Considering the 90-day investment horizon Affiliated Managers is expected to generate 1.8 times less return on investment than Structured Products. But when comparing it to its historical volatility, Affiliated Managers Group is 2.24 times less risky than Structured Products. It trades about 0.03 of its potential returns per unit of risk. Structured Products Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,488 in Structured Products Corp on August 26, 2024 and sell it today you would earn a total of 406.00 from holding Structured Products Corp or generate 16.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.79% |
| Values | Daily Returns |
Affiliated Managers Group vs. Structured Products Corp
Performance |
| Timeline |
| Affiliated Managers |
| Structured Products Corp |
Affiliated Managers and Structured Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and Structured Products
The main advantage of trading using opposite Affiliated Managers and Structured Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, Structured Products 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 Structured Products will offset losses from the drop in Structured Products' long position.| Affiliated Managers vs. DBA Sempra 5750 | Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. American Financial Group | Affiliated Managers vs. National Rural Utilities |
| Structured Products vs. DBA Sempra 5750 | Structured Products vs. CMS Energy Corp | Structured Products vs. American Financial Group | Structured Products vs. Maiden Holdings North |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |