Correlation Between Amg Frontier and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Amg Frontier 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 Frontier 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 Frontier Small and Amg Managers Fairpointe, you can compare the effects of market volatilities on Amg Frontier 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 Frontier with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Frontier and Amg Managers.
Diversification Opportunities for Amg Frontier and Amg Managers
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Amg is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe 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 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 Fairpointe has no effect on the direction of Amg Frontier i.e., Amg Frontier and Amg Managers go up and down completely randomly.
Pair Corralation between Amg Frontier and Amg Managers
Assuming the 90 days horizon Amg Frontier is expected to generate 2.59 times less return on investment than Amg Managers. In addition to that, Amg Frontier is 1.85 times more volatile than Amg Managers Fairpointe. It trades about 0.06 of its total potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.27 per unit of volatility. If you would invest 2,183 in Amg Managers Fairpointe on November 5, 2024 and sell it today you would earn a total of 77.00 from holding Amg Managers Fairpointe or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Frontier Small vs. Amg Managers Fairpointe
Performance |
| Timeline |
| Amg Frontier Small |
| Amg Managers Fairpointe |
Amg Frontier and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Frontier and Amg Managers
The main advantage of trading using opposite Amg Frontier and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier 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 Frontier vs. International Investors Gold | Amg Frontier vs. James Balanced Golden | Amg Frontier vs. Deutsche Gold Precious | Amg Frontier vs. Precious Metals And |
| Amg Managers vs. Invesco Technology Fund | Amg Managers vs. Specialized Technology Fund | Amg Managers vs. Dreyfus Technology Growth | Amg Managers vs. Red Oak Technology |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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