Correlation Between State Street and Amg Managers
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Amg Managers Centersquare, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Amg Managers.
Diversification Opportunities for State Street and Amg Managers
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and Amg is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target 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 State Street 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 State Street Target 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 State Street i.e., State Street and Amg Managers go up and down completely randomly.
Pair Corralation between State Street and Amg Managers
Assuming the 90 days horizon State Street is expected to generate 1.36 times less return on investment than Amg Managers. But when comparing it to its historical volatility, State Street Target is 2.35 times less risky than Amg Managers. It trades about 0.08 of its potential returns per unit of risk. Amg Managers Centersquare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Amg Managers Centersquare on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Amg Managers Centersquare or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
State Street Target vs. Amg Managers Centersquare
Performance |
| Timeline |
| State Street Target |
| Amg Managers Centersquare |
State Street and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Amg Managers
The main advantage of trading using opposite State Street and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Amg Managers Centersquare | State Street vs. Vy Clarion Real | State Street vs. Forum Real Estate | State Street vs. Deutsche Real Estate |
| Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price | Amg Managers vs. T Rowe Price |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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