Correlation Between Amg Frontier and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Amg Frontier and Amg Southernsun 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 Southernsun 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 Southernsun Equity, you can compare the effects of market volatilities on Amg Frontier and Amg Southernsun 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 Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Frontier and Amg Southernsun.
Diversification Opportunities for Amg Frontier and Amg Southernsun
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and Amg is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity 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 Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Amg Frontier i.e., Amg Frontier and Amg Southernsun go up and down completely randomly.
Pair Corralation between Amg Frontier and Amg Southernsun
Assuming the 90 days horizon Amg Frontier Small is expected to under-perform the Amg Southernsun. In addition to that, Amg Frontier is 1.34 times more volatile than Amg Southernsun Equity. It trades about -0.19 of its total potential returns per unit of risk. Amg Southernsun Equity is currently generating about -0.13 per unit of volatility. If you would invest 1,329 in Amg Southernsun Equity on November 29, 2024 and sell it today you would lose (37.00) from holding Amg Southernsun Equity or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amg Frontier Small vs. Amg Southernsun Equity
Performance |
| Timeline |
| Amg Frontier Small |
| Amg Southernsun Equity |
Amg Frontier and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Frontier and Amg Southernsun
The main advantage of trading using opposite Amg Frontier and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier position performs unexpectedly, Amg Southernsun 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 Southernsun will offset losses from the drop in Amg Southernsun's long position.| Amg Frontier vs. Columbia Small Cap | Amg Frontier vs. Baron Discovery Fund | Amg Frontier vs. Astoncrosswind Small Cap | Amg Frontier vs. Amg Frontier Small |
| Amg Southernsun vs. Amg Southernsun Small | Amg Southernsun vs. Amg Southernsun Equity | Amg Southernsun vs. Cambiar International Equity | Amg Southernsun vs. Astoncrosswind Small Cap |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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