Correlation Between Amg Frontier and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Amg Frontier and Amg Gwk 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 Frontier and Amg Gwk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Frontier Small and Amg Gwk E, you can compare the effects of market volatilities on Amg Frontier and Amg Gwk 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 Frontier with a short position of Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Frontier and Amg Gwk.
Diversification Opportunities for Amg Frontier and Amg Gwk
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Amg is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small and Amg Gwk E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk E and Amg Frontier 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 Frontier Small are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk E has no effect on the direction of Amg Frontier i.e., Amg Frontier and Amg Gwk go up and down completely randomly.
Pair Corralation between Amg Frontier and Amg Gwk
Assuming the 90 days horizon Amg Frontier Small is expected to generate 3.26 times more return on investment than Amg Gwk. However, Amg Frontier is 3.26 times more volatile than Amg Gwk E. It trades about 0.2 of its potential returns per unit of risk. Amg Gwk E is currently generating about -0.02 per unit of risk. If you would invest 884.00 in Amg Frontier Small on October 21, 2024 and sell it today you would earn a total of 36.00 from holding Amg Frontier Small or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Frontier Small vs. Amg Gwk E
Performance |
| Timeline |
| Amg Frontier Small |
| Amg Gwk E |
Amg Frontier and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Frontier and Amg Gwk
The main advantage of trading using opposite Amg Frontier and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier position performs unexpectedly, Amg Gwk 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 Gwk will offset losses from the drop in Amg Gwk's long position.| Amg Frontier vs. Amg Southernsun Equity | Amg Frontier vs. Amg Southernsun Equity | Amg Frontier vs. Amg Fq Long Short | Amg Frontier vs. Amg Southernsun Small |
| Amg Gwk vs. Amg Southernsun Equity | Amg Gwk vs. Amg Southernsun Equity | Amg Gwk vs. Amg Fq Long Short | Amg Gwk vs. Amg Southernsun Small |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |