Correlation Between Affiliated Managers and Prenetics Global
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and Prenetics Global 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 Prenetics Global 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 Prenetics Global, you can compare the effects of market volatilities on Affiliated Managers and Prenetics Global 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 Prenetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Prenetics Global.
Diversification Opportunities for Affiliated Managers and Prenetics Global
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Affiliated and Prenetics is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Prenetics Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prenetics Global 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 Prenetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prenetics Global has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Prenetics Global go up and down completely randomly.
Pair Corralation between Affiliated Managers and Prenetics Global
Considering the 90-day investment horizon Affiliated Managers Group is expected to generate 0.28 times more return on investment than Prenetics Global. However, Affiliated Managers Group is 3.55 times less risky than Prenetics Global. It trades about 0.19 of its potential returns per unit of risk. Prenetics Global is currently generating about 0.03 per unit of risk. If you would invest 2,241 in Affiliated Managers Group on November 9, 2024 and sell it today you would earn a total of 89.00 from holding Affiliated Managers Group or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Managers Group vs. Prenetics Global
Performance |
| Timeline |
| Affiliated Managers |
| Prenetics Global |
Affiliated Managers and Prenetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and Prenetics Global
The main advantage of trading using opposite Affiliated Managers and Prenetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, Prenetics Global 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 Prenetics Global will offset losses from the drop in Prenetics Global's 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 |
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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 Stocks Directory module to find actively traded stocks across global markets.
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