Correlation Between Amg Southernsun and Amg Frontier
Can any of the company-specific risk be diversified away by investing in both Amg Southernsun and Amg Frontier 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 Frontier 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 Frontier Small, you can compare the effects of market volatilities on Amg Southernsun and Amg Frontier 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 Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Southernsun and Amg Frontier.
Diversification Opportunities for Amg Southernsun and Amg Frontier
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Amg is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amg Southernsun Small and Amg Frontier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Frontier Small 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 Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Frontier Small has no effect on the direction of Amg Southernsun i.e., Amg Southernsun and Amg Frontier go up and down completely randomly.
Pair Corralation between Amg Southernsun and Amg Frontier
Assuming the 90 days horizon Amg Southernsun is expected to generate 1.01 times less return on investment than Amg Frontier. But when comparing it to its historical volatility, Amg Southernsun Small is 1.24 times less risky than Amg Frontier. It trades about 0.2 of its potential returns per unit of risk. Amg Frontier Small is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 893.00 in Amg Frontier Small on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Amg Frontier Small or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amg Southernsun Small vs. Amg Frontier Small
Performance |
| Timeline |
| Amg Southernsun Small |
| Amg Frontier Small |
Amg Southernsun and Amg Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Southernsun and Amg Frontier
The main advantage of trading using opposite Amg Southernsun and Amg Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Southernsun position performs unexpectedly, Amg Frontier 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 Frontier will offset losses from the drop in Amg Frontier's long position.| Amg Southernsun vs. Blackrock Sm Cap | Amg Southernsun vs. Vanguard Strategic Small Cap | Amg Southernsun vs. Volumetric Fund Volumetric | Amg Southernsun vs. Balanced Fund Investor |
| Amg Frontier vs. Amg Southernsun Equity | Amg Frontier vs. Amg Southernsun Equity | Amg Frontier vs. Amg Fq Long Short | Amg Frontier 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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