Correlation Between Amg Managers and Financial Industries
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Financial Industries 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 Financial Industries 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 Financial Industries Fund, you can compare the effects of market volatilities on Amg Managers and Financial Industries 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 Financial Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Financial Industries.
Diversification Opportunities for Amg Managers and Financial Industries
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Financial is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Financial Industries Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Industries 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 Financial Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Industries has no effect on the direction of Amg Managers i.e., Amg Managers and Financial Industries go up and down completely randomly.
Pair Corralation between Amg Managers and Financial Industries
Assuming the 90 days horizon Amg Managers is expected to generate 16.91 times less return on investment than Financial Industries. In addition to that, Amg Managers is 1.17 times more volatile than Financial Industries Fund. It trades about 0.01 of its total potential returns per unit of risk. Financial Industries Fund is currently generating about 0.26 per unit of volatility. If you would invest 1,820 in Financial Industries Fund on November 4, 2024 and sell it today you would earn a total of 99.00 from holding Financial Industries Fund or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Centersquare vs. Financial Industries Fund
Performance |
| Timeline |
| Amg Managers Centersquare |
| Financial Industries |
Amg Managers and Financial Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Financial Industries
The main advantage of trading using opposite Amg Managers and Financial Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Financial Industries 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 Financial Industries will offset losses from the drop in Financial Industries' long position.| Amg Managers vs. Transamerica Capital Growth | Amg Managers vs. Praxis Genesis Growth | Amg Managers vs. Qs Defensive Growth | Amg Managers vs. Upright Growth Income |
| Financial Industries vs. Dws Global Macro | Financial Industries vs. Tax Managed Large Cap | Financial Industries vs. Touchstone Large Cap | Financial Industries vs. Tfa Alphagen Growth |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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