Correlation Between Rational Special and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Rational Special 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 Rational Special and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rational Special Situations and Amg Managers Centersquare, you can compare the effects of market volatilities on Rational Special 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 Rational Special with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Special and Amg Managers.
Diversification Opportunities for Rational Special and Amg Managers
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rational and Amg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Rational Special Situations and Amg Managers Centersquare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Centersquare and Rational Special 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 Rational Special Situations 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 Centersquare has no effect on the direction of Rational Special i.e., Rational Special and Amg Managers go up and down completely randomly.
Pair Corralation between Rational Special and Amg Managers
Assuming the 90 days horizon Rational Special is expected to generate 2.33 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Rational Special Situations is 11.22 times less risky than Amg Managers. It trades about 0.2 of its potential returns per unit of risk. Amg Managers Centersquare is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,008 in Amg Managers Centersquare on September 3, 2024 and sell it today you would earn a total of 232.00 from holding Amg Managers Centersquare or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rational Special Situations vs. Amg Managers Centersquare
Performance |
| Timeline |
| Rational Special Sit |
| Amg Managers Centersquare |
Rational Special and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rational Special and Amg Managers
The main advantage of trading using opposite Rational Special and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Special 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.| Rational Special vs. Lord Abbett Convertible | Rational Special vs. Advent Claymore Convertible | Rational Special vs. Absolute Convertible Arbitrage | Rational Special vs. Rationalpier 88 Convertible |
| Amg Managers vs. Deutsche Health And | Amg Managers vs. Fidelity Advisor Health | Amg Managers vs. Blackrock Health Sciences | Amg Managers vs. Invesco Global Health |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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