Correlation Between Amg Renaissance and California Bond
Can any of the company-specific risk be diversified away by investing in both Amg Renaissance and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Amg Renaissance and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Renaissance and California Bond.
Diversification Opportunities for Amg Renaissance and California Bond
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amg and California is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Amg Renaissance Large and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Amg Renaissance i.e., Amg Renaissance and California Bond go up and down completely randomly.
Pair Corralation between Amg Renaissance and California Bond
Assuming the 90 days horizon Amg Renaissance Large is expected to generate 2.71 times more return on investment than California Bond. However, Amg Renaissance is 2.71 times more volatile than California Bond Fund. It trades about 0.43 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.22 per unit of risk. If you would invest 1,898 in Amg Renaissance Large on September 1, 2024 and sell it today you would earn a total of 163.00 from holding Amg Renaissance Large or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Renaissance Large vs. California Bond Fund
Performance |
| Timeline |
| Amg Renaissance Large |
| California Bond |
Amg Renaissance and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Renaissance and California Bond
The main advantage of trading using opposite Amg Renaissance and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Renaissance position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Amg Renaissance vs. Health Biotchnology Portfolio | Amg Renaissance vs. Eventide Healthcare Life | Amg Renaissance vs. Alphacentric Lifesci Healthcare | Amg Renaissance vs. Allianzgi Health Sciences |
| California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Intermediate Term Bond Fund | California Bond vs. Usaa Intermediate Term |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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