Correlation Between Amg Renaissance and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Amg Renaissance and Amg Managers 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 Renaissance and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Renaissance Large and Amg Managers Lmcg, you can compare the effects of market volatilities on Amg Renaissance and Amg Managers 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 Renaissance with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Renaissance and Amg Managers.
Diversification Opportunities for Amg Renaissance and Amg Managers
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and Amg is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amg Renaissance Large and Amg Managers Lmcg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Lmcg and Amg Renaissance 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 Renaissance Large are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Lmcg has no effect on the direction of Amg Renaissance i.e., Amg Renaissance and Amg Managers go up and down completely randomly.
Pair Corralation between Amg Renaissance and Amg Managers
Assuming the 90 days horizon Amg Renaissance Large is expected to generate 1.02 times more return on investment than Amg Managers. However, Amg Renaissance is 1.02 times more volatile than Amg Managers Lmcg. It trades about 0.21 of its potential returns per unit of risk. Amg Managers Lmcg is currently generating about 0.18 per unit of risk. If you would invest 1,800 in Amg Renaissance Large on November 9, 2024 and sell it today you would earn a total of 73.00 from holding Amg Renaissance Large or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Renaissance Large vs. Amg Managers Lmcg
Performance |
| Timeline |
| Amg Renaissance Large |
| Amg Managers Lmcg |
Amg Renaissance and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Renaissance and Amg Managers
The main advantage of trading using opposite Amg Renaissance and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Renaissance position performs unexpectedly, Amg Managers 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Amg Renaissance vs. Transamerica Cleartrack Retirement | Amg Renaissance vs. Sierra E Retirement | Amg Renaissance vs. Wealthbuilder Moderate Balanced | Amg Renaissance vs. Tiaa Cref Lifecycle Retirement |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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