Correlation Between River and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both River and AMG Advanced 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 River and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between River and Mercantile and AMG Advanced Metallurgical, you can compare the effects of market volatilities on River and AMG Advanced 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 River with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of River and AMG Advanced.
Diversification Opportunities for River and AMG Advanced
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between River and AMG is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding River and Mercantile and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and River 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 River and Mercantile are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of River i.e., River and AMG Advanced go up and down completely randomly.
Pair Corralation between River and AMG Advanced
Assuming the 90 days trading horizon River and Mercantile is expected to under-perform the AMG Advanced. But the stock apears to be less risky and, when comparing its historical volatility, River and Mercantile is 5.55 times less risky than AMG Advanced. The stock trades about -0.03 of its potential returns per unit of risk. The AMG Advanced Metallurgical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,413 in AMG Advanced Metallurgical on November 3, 2024 and sell it today you would lose (20.00) from holding AMG Advanced Metallurgical or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
River and Mercantile vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| River and Mercantile |
| AMG Advanced Metallu |
River and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with River and AMG Advanced
The main advantage of trading using opposite River and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if River position performs unexpectedly, AMG Advanced 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 Advanced will offset losses from the drop in AMG Advanced's long position.| River vs. Fidelity National Information | River vs. Datalogic | River vs. Creo Medical Group | River vs. Advanced Medical Solutions |
| AMG Advanced vs. Heavitree Brewery | AMG Advanced vs. Ebro Foods | AMG Advanced vs. Bell Food Group | AMG Advanced vs. Litigation Capital Management |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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