Correlation Between AMG Advanced and Dassault Aviation
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Dassault Aviation 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 AMG Advanced and Dassault Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Dassault Aviation SA, you can compare the effects of market volatilities on AMG Advanced and Dassault Aviation 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 AMG Advanced with a short position of Dassault Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Dassault Aviation.
Diversification Opportunities for AMG Advanced and Dassault Aviation
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and Dassault is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of AMG Advanced i.e., AMG Advanced and Dassault Aviation go up and down completely randomly.
Pair Corralation between AMG Advanced and Dassault Aviation
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Dassault Aviation. In addition to that, AMG Advanced is 1.96 times more volatile than Dassault Aviation SA. It trades about -0.2 of its total potential returns per unit of risk. Dassault Aviation SA is currently generating about 0.08 per unit of volatility. If you would invest 18,740 in Dassault Aviation SA on September 24, 2024 and sell it today you would earn a total of 310.00 from holding Dassault Aviation SA or generate 1.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
AMG Advanced Metallurgical vs. Dassault Aviation SA
Performance |
Timeline |
AMG Advanced Metallu |
Dassault Aviation |
AMG Advanced and Dassault Aviation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMG Advanced and Dassault Aviation
The main advantage of trading using opposite AMG Advanced and Dassault Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Dassault Aviation 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 Dassault Aviation will offset losses from the drop in Dassault Aviation's long position.AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
Dassault Aviation vs. Uniper SE | Dassault Aviation vs. Mulberry Group PLC | Dassault Aviation vs. London Security Plc | Dassault Aviation vs. Triad Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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