Correlation Between Scharf Global and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Amg Managers 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 Scharf Global and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Amg Managers Lmcg, you can compare the effects of market volatilities on Scharf Global and Amg Managers 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 Scharf Global with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Amg Managers.
Diversification Opportunities for Scharf Global and Amg Managers
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Amg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Amg Managers Lmcg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Lmcg and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Lmcg has no effect on the direction of Scharf Global i.e., Scharf Global and Amg Managers go up and down completely randomly.
Pair Corralation between Scharf Global and Amg Managers
Assuming the 90 days horizon Scharf Global is expected to generate 3.62 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Scharf Global Opportunity is 1.8 times less risky than Amg Managers. It trades about 0.07 of its potential returns per unit of risk. Amg Managers Lmcg is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,755 in Amg Managers Lmcg on September 12, 2024 and sell it today you would earn a total of 169.00 from holding Amg Managers Lmcg or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Amg Managers Lmcg
Performance |
| Timeline |
| Scharf Global Opportunity |
| Amg Managers Lmcg |
Scharf Global and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Amg Managers
The main advantage of trading using opposite Scharf Global and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Amg Managers 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 Managers will offset losses from the drop in Amg Managers' long position.| Scharf Global vs. Invesco Energy Fund | Scharf Global vs. Goehring Rozencwajg Resources | Scharf Global vs. Oil Gas Ultrasector | Scharf Global vs. Jennison Natural Resources |
| Amg Managers vs. Shelton Emerging Markets | Amg Managers vs. Ep Emerging Markets | Amg Managers vs. Transamerica Emerging Markets | Amg Managers vs. Eagle Mlp Strategy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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