Correlation Between Amg Managers and State Street
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Centersquare vs. State Street Target
Performance |
| Timeline |
| Amg Managers Centersquare |
| State Street Target |
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.| Amg Managers vs. Realty Income | Amg Managers vs. Dynex Capital | Amg Managers vs. First Industrial Realty | Amg Managers vs. Healthcare Realty Trust |
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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 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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