Correlation Between Amg Managers and Baron Health
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Baron Health 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 Managers and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Managers Centersquare and Baron Health Care, you can compare the effects of market volatilities on Amg Managers and Baron Health 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 Managers with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Baron Health.
Diversification Opportunities for Amg Managers and Baron Health
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amg and Baron is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and Amg 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 Amg Managers Centersquare are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Amg Managers i.e., Amg Managers and Baron Health go up and down completely randomly.
Pair Corralation between Amg Managers and Baron Health
Assuming the 90 days horizon Amg Managers Centersquare is expected to generate 1.01 times more return on investment than Baron Health. However, Amg Managers is 1.01 times more volatile than Baron Health Care. It trades about 0.15 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.01 per unit of risk. If you would invest 1,038 in Amg Managers Centersquare on September 12, 2024 and sell it today you would earn a total of 177.00 from holding Amg Managers Centersquare or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Centersquare vs. Baron Health Care
Performance |
| Timeline |
| Amg Managers Centersquare |
| Baron Health Care |
Amg Managers and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Baron Health
The main advantage of trading using opposite Amg Managers and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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