Correlation Between NYSE Composite and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Affiliated 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 NYSE Composite and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Affiliated Managers Group, you can compare the effects of market volatilities on NYSE Composite and Affiliated 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 NYSE Composite with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Affiliated Managers.
Diversification Opportunities for NYSE Composite and Affiliated Managers
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Affiliated is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and NYSE Composite 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 NYSE Composite are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of NYSE Composite i.e., NYSE Composite and Affiliated Managers go up and down completely randomly.
Pair Corralation between NYSE Composite and Affiliated Managers
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.25 times less return on investment than Affiliated Managers. But when comparing it to its historical volatility, NYSE Composite is 2.23 times less risky than Affiliated Managers. It trades about 0.27 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 17,954 in Affiliated Managers Group on October 20, 2024 and sell it today you would earn a total of 746.00 from holding Affiliated Managers Group or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Affiliated Managers Group
Performance |
| Timeline |
NYSE Composite and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Affiliated Managers Group
Pair trading matchups for Affiliated Managers
Pair Trading with NYSE Composite and Affiliated Managers
The main advantage of trading using opposite NYSE Composite and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Affiliated 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| NYSE Composite vs. National Health Investors | NYSE Composite vs. Arbor Realty Trust | NYSE Composite vs. Canaf Investments | NYSE Composite vs. Freedom Holding Corp |
| Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund | Affiliated Managers vs. Blackrock Floating Rate |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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