Correlation Between Young Cos and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and AMG Advanced.
Diversification Opportunities for Young Cos and AMG Advanced
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Young and AMG is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and AMG Advanced go up and down completely randomly.
Pair Corralation between Young Cos and AMG Advanced
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.5 times more return on investment than AMG Advanced. However, Young Cos Brewery is 1.98 times less risky than AMG Advanced. It trades about 0.12 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.07 per unit of risk. If you would invest 61,079 in Young Cos Brewery on September 12, 2024 and sell it today you would earn a total of 1,721 from holding Young Cos Brewery or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Young Cos Brewery vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Young Cos Brewery |
| AMG Advanced Metallu |
Young Cos and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and AMG Advanced
The main advantage of trading using opposite Young Cos and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. National Atomic Co | Young Cos vs. OTP Bank Nyrt | Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co |
| AMG Advanced vs. Neometals | AMG Advanced vs. Bisichi Mining PLC | AMG Advanced vs. Playtech Plc | AMG Advanced vs. Metals Exploration Plc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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