Correlation Between Amg Southernsun and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Amg Southernsun 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 Amg Southernsun and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Southernsun Equity and Amg Managers Brandywine, you can compare the effects of market volatilities on Amg Southernsun 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 Amg Southernsun with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Southernsun and Amg Managers.
Diversification Opportunities for Amg Southernsun and Amg Managers
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Amg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amg Southernsun Equity and Amg Managers Brandywine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Brandywine and Amg Southernsun 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 Amg Southernsun Equity 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 Brandywine has no effect on the direction of Amg Southernsun i.e., Amg Southernsun and Amg Managers go up and down completely randomly.
Pair Corralation between Amg Southernsun and Amg Managers
Assuming the 90 days horizon Amg Southernsun Equity is expected to generate 1.56 times more return on investment than Amg Managers. However, Amg Southernsun is 1.56 times more volatile than Amg Managers Brandywine. It trades about 0.23 of its potential returns per unit of risk. Amg Managers Brandywine is currently generating about -0.05 per unit of risk. If you would invest 1,475 in Amg Southernsun Equity on August 26, 2024 and sell it today you would earn a total of 83.00 from holding Amg Southernsun Equity or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Southernsun Equity vs. Amg Managers Brandywine
Performance |
| Timeline |
| Amg Southernsun Equity |
| Amg Managers Brandywine |
Amg Southernsun and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Southernsun and Amg Managers
The main advantage of trading using opposite Amg Southernsun and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Southernsun 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.| Amg Southernsun vs. Amg Southernsun Small | Amg Southernsun vs. Cambiar International Equity | Amg Southernsun vs. Astoncrosswind Small Cap | Amg Southernsun vs. Hodges Small Cap |
| Amg Managers vs. Amg Southernsun Equity | Amg Managers vs. Amg Southernsun Equity | Amg Managers vs. Amg Fq Long Short | Amg Managers vs. Amg Southernsun Small |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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