Correlation Between Synthomer Plc and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and AMG Advanced 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 Synthomer Plc and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Synthomer Plc and AMG Advanced 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 Synthomer Plc with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and AMG Advanced.
Diversification Opportunities for Synthomer Plc and AMG Advanced
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synthomer and AMG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Synthomer Plc 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 Synthomer plc are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and AMG Advanced go up and down completely randomly.
Pair Corralation between Synthomer Plc and AMG Advanced
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the AMG Advanced. In addition to that, Synthomer Plc is 1.26 times more volatile than AMG Advanced Metallurgical. It trades about -0.14 of its total potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.1 per unit of volatility. If you would invest 2,116 in AMG Advanced Metallurgical on August 26, 2024 and sell it today you would lose (630.00) from holding AMG Advanced Metallurgical or give up 29.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthomer plc vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Synthomer plc |
| AMG Advanced Metallu |
Synthomer Plc and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and AMG Advanced
The main advantage of trading using opposite Synthomer Plc and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, AMG Advanced 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 Advanced will offset losses from the drop in AMG Advanced's long position.| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Centamin PLC | Synthomer Plc vs. Atalaya Mining |
| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Toyota Motor Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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