Correlation Between NYSE Composite and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Amg Yacktman 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 Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Amg Yacktman Focused, you can compare the effects of market volatilities on NYSE Composite and Amg Yacktman 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 Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Amg Yacktman.
Diversification Opportunities for NYSE Composite and Amg Yacktman
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Amg is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Amg Yacktman Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman Focused 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 Amg Yacktman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Yacktman Focused has no effect on the direction of NYSE Composite i.e., NYSE Composite and Amg Yacktman go up and down completely randomly.
Pair Corralation between NYSE Composite and Amg Yacktman
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.95 times more return on investment than Amg Yacktman. However, NYSE Composite is 1.06 times less risky than Amg Yacktman. It trades about 0.06 of its potential returns per unit of risk. Amg Yacktman Focused is currently generating about 0.01 per unit of risk. If you would invest 1,599,940 in NYSE Composite on October 25, 2024 and sell it today you would earn a total of 382,822 from holding NYSE Composite or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NYSE Composite vs. Amg Yacktman Focused
Performance |
| Timeline |
NYSE Composite and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Amg Yacktman Focused
Pair trading matchups for Amg Yacktman
Pair Trading with NYSE Composite and Amg Yacktman
The main advantage of trading using opposite NYSE Composite and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Amg Yacktman 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 Yacktman will offset losses from the drop in Amg Yacktman's long position.| NYSE Composite vs. Tesla Inc | NYSE Composite vs. Sea | NYSE Composite vs. NETGEAR | NYSE Composite vs. Gentex |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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