Correlation Between Amg Southernsun and Aston Montag
Can any of the company-specific risk be diversified away by investing in both Amg Southernsun and Aston Montag 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 Aston Montag 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 Aston Montag Caldwell, you can compare the effects of market volatilities on Amg Southernsun and Aston Montag 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 Aston Montag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Southernsun and Aston Montag.
Diversification Opportunities for Amg Southernsun and Aston Montag
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Aston is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amg Southernsun Small and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell 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 Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of Amg Southernsun i.e., Amg Southernsun and Aston Montag go up and down completely randomly.
Pair Corralation between Amg Southernsun and Aston Montag
Assuming the 90 days horizon Amg Southernsun is expected to generate 3.01 times less return on investment than Aston Montag. In addition to that, Amg Southernsun is 1.39 times more volatile than Aston Montag Caldwell. It trades about 0.02 of its total potential returns per unit of risk. Aston Montag Caldwell is currently generating about 0.09 per unit of volatility. If you would invest 913.00 in Aston Montag Caldwell on August 31, 2024 and sell it today you would earn a total of 453.00 from holding Aston Montag Caldwell or generate 49.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Southernsun Small vs. Aston Montag Caldwell
Performance |
| Timeline |
| Amg Southernsun Small |
| Aston Montag Caldwell |
Amg Southernsun and Aston Montag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Southernsun and Aston Montag
The main advantage of trading using opposite Amg Southernsun and Aston Montag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Southernsun position performs unexpectedly, Aston Montag 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 Aston Montag will offset losses from the drop in Aston Montag's long position.| Amg Southernsun vs. Mid Cap Value Profund | Amg Southernsun vs. Hennessy Nerstone Mid | Amg Southernsun vs. Pace Smallmedium Value | Amg Southernsun vs. Royce Opportunity Fund |
| Aston Montag vs. Europacific Growth Fund | Aston Montag vs. Washington Mutual Investors | Aston Montag vs. Capital World Growth | Aston Montag vs. HUMANA INC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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