Correlation Between Amg Managers and Capital Income
Can any of the company-specific risk be diversified away by investing in both Amg Managers and Capital Income 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 Capital Income 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 Capital Income Builder, you can compare the effects of market volatilities on Amg Managers and Capital Income 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 Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Capital Income.
Diversification Opportunities for Amg Managers and Capital Income
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amg and Capital is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder 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 Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Amg Managers i.e., Amg Managers and Capital Income go up and down completely randomly.
Pair Corralation between Amg Managers and Capital Income
Assuming the 90 days horizon Amg Managers Centersquare is expected to generate 2.25 times more return on investment than Capital Income. However, Amg Managers is 2.25 times more volatile than Capital Income Builder. It trades about 0.04 of its potential returns per unit of risk. Capital Income Builder is currently generating about 0.04 per unit of risk. If you would invest 1,191 in Amg Managers Centersquare on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Amg Managers Centersquare or generate 0.5% 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. Capital Income Builder
Performance |
| Timeline |
| Amg Managers Centersquare |
| Capital Income Builder |
Amg Managers and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and Capital Income
The main advantage of trading using opposite Amg Managers and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, Capital Income 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 Capital Income will offset losses from the drop in Capital Income's long position.| Amg Managers vs. Realty Income | Amg Managers vs. Dynex Capital | Amg Managers vs. First Industrial Realty | Amg Managers vs. Healthcare Realty Trust |
| Capital Income vs. Columbia Real Estate | Capital Income vs. Dunham Real Estate | Capital Income vs. Nuveen Real Estate | Capital Income vs. Sa Real Estate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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