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 Small and Amg Managers Fairpointe, 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
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amg and Amg is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amg Southernsun Small and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe 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 Small 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 Fairpointe 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 is expected to generate 1.18 times less return on investment than Amg Managers. In addition to that, Amg Southernsun is 1.33 times more volatile than Amg Managers Fairpointe. It trades about 0.21 of its total potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.32 per unit of volatility. If you would invest 2,255 in Amg Managers Fairpointe on August 31, 2024 and sell it today you would earn a total of 165.00 from holding Amg Managers Fairpointe or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Southernsun Small vs. Amg Managers Fairpointe
Performance |
| Timeline |
| Amg Southernsun Small |
| Amg Managers Fairpointe |
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. Vanguard Small Cap Index | Amg Southernsun vs. Vanguard Small Cap Index | Amg Southernsun vs. T Rowe Price | Amg Southernsun vs. HUMANA INC |
| Amg Managers vs. Amg Yacktman Focused | Amg Managers vs. Heartland Value Plus | Amg Managers vs. Common Stock Fund | Amg Managers vs. Perkins Mid Cap |
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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