Correlation Between Amg Managers and State Street

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Can any of the company-specific risk be diversified away by investing in both Amg Managers and State Street 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 State Street 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 State Street Target, you can compare the effects of market volatilities on Amg Managers and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and State Street.

Diversification Opportunities for Amg Managers and State Street

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Amg and State is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Amg Managers i.e., Amg Managers and State Street go up and down completely randomly.

Pair Corralation between Amg Managers and State Street

Assuming the 90 days horizon Amg Managers is expected to generate 2.24 times less return on investment than State Street. In addition to that, Amg Managers is 2.8 times more volatile than State Street Target. It trades about 0.04 of its total potential returns per unit of risk. State Street Target is currently generating about 0.23 per unit of volatility. If you would invest  1,290  in State Street Target on September 13, 2024 and sell it today you would earn a total of  16.00  from holding State Street Target or generate 1.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Amg Managers Centersquare  vs.  State Street Target

 Performance 
       Timeline  
Amg Managers Centersquare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amg Managers Centersquare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Amg Managers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
State Street Target 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in State Street Target are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Managers and State Street Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amg Managers and State Street

The main advantage of trading using opposite Amg Managers and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.
The idea behind Amg Managers Centersquare and State Street Target pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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