Correlation Between Balanced Fund and Amg River
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Amg River 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 Balanced Fund and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Amg River Road, you can compare the effects of market volatilities on Balanced Fund and Amg River 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 Balanced Fund with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Amg River.
Diversification Opportunities for Balanced Fund and Amg River
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Amg is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Balanced Fund i.e., Balanced Fund and Amg River go up and down completely randomly.
Pair Corralation between Balanced Fund and Amg River
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 0.75 times more return on investment than Amg River. However, Balanced Fund Investor is 1.34 times less risky than Amg River. It trades about 0.1 of its potential returns per unit of risk. Amg River Road is currently generating about 0.06 per unit of risk. If you would invest 1,570 in Balanced Fund Investor on September 2, 2024 and sell it today you would earn a total of 458.00 from holding Balanced Fund Investor or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Amg River Road
Performance |
| Timeline |
| Balanced Fund Investor |
| Amg River Road |
Balanced Fund and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Amg River
The main advantage of trading using opposite Balanced Fund and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Amg River 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 River will offset losses from the drop in Amg River's long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Amg River vs. Pear Tree Polaris | Amg River vs. Artisan Global Value | Amg River vs. Amg River Road | Amg River vs. Tcw Relative Value |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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