Correlation Between Ambrus Core and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Ambrus Core and Transamerica Intermediate 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 Ambrus Core and Transamerica Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambrus Core Bond and Transamerica Intermediate Muni, you can compare the effects of market volatilities on Ambrus Core and Transamerica Intermediate 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 Ambrus Core with a short position of Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Transamerica Intermediate.
Diversification Opportunities for Ambrus Core and Transamerica Intermediate
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ambrus and Transamerica is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Ambrus Core i.e., Ambrus Core and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Ambrus Core and Transamerica Intermediate
Assuming the 90 days horizon Ambrus Core Bond is expected to generate 1.04 times more return on investment than Transamerica Intermediate. However, Ambrus Core is 1.04 times more volatile than Transamerica Intermediate Muni. It trades about 0.08 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.07 per unit of risk. If you would invest 903.00 in Ambrus Core Bond on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Ambrus Core Bond or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambrus Core Bond vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Ambrus Core Bond |
| Transamerica Intermediate |
Ambrus Core and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambrus Core and Transamerica Intermediate
The main advantage of trading using opposite Ambrus Core and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambrus Core position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Ambrus Core vs. John Hancock Financial | Ambrus Core vs. Vanguard Financials Index | Ambrus Core vs. Transamerica Financial Life | Ambrus Core vs. Blackrock Financial Institutions |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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