Correlation Between AMG Advanced and Fugro NV

Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Fugro NV 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 Fugro NV 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 Fugro NV, you can compare the effects of market volatilities on AMG Advanced and Fugro NV 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 Fugro NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Fugro NV.

Diversification Opportunities for AMG Advanced and Fugro NV

0.83

Correlation Coefficient

AMG Advanced  Fugro NV

Very poor diversification

The 3 months correlation between AMG and Fugro is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Fugro NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fugro NV 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 Fugro NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fugro NV has no effect on the direction of AMG Advanced i.e., AMG Advanced and Fugro NV go up and down completely randomly.

Pair Corralation between AMG Advanced and Fugro NV

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Fugro NV. In addition to that, AMG Advanced is 1.19 times more volatile than Fugro NV. It trades about -0.31 of its total potential returns per unit of risk. Fugro NV is currently generating about -0.19 per unit of volatility. If you would invest  1,708  in Fugro NV on September 18, 2024 and sell it today you would lose (93.00) from holding Fugro NV or give up 5.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Fugro NV

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fugro NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fugro NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AMG Advanced and Fugro NV

The main advantage of trading using opposite AMG Advanced and Fugro NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Fugro NV 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 Fugro NV will offset losses from the drop in Fugro NV's long position.

The idea behind AMG Advanced Metallurgical and Fugro NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.