Correlation Between Amg River and Lsv Managed

Can any of the company-specific risk be diversified away by investing in both Amg River and Lsv Managed 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 River and Lsv Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amg River Road and Lsv Managed Volatility, you can compare the effects of market volatilities on Amg River and Lsv Managed 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 River with a short position of Lsv Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Lsv Managed.

Diversification Opportunities for Amg River and Lsv Managed

0.88

Correlation Coefficient

Amg River  Lsv Managed

Very poor diversification

The 3 months correlation between Amg and Lsv is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Lsv Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Managed Volatility and Amg River 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 River Road are associated (or correlated) with Lsv Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Managed Volatility has no effect on the direction of Amg River i.e., Amg River and Lsv Managed go up and down completely randomly.

Pair Corralation between Amg River and Lsv Managed

Assuming the 90 days horizon Amg River Road is expected to generate 0.78 times more return on investment than Lsv Managed. However, Amg River Road is 1.29 times less risky than Lsv Managed. It trades about 0.11 of its potential returns per unit of risk. Lsv Managed Volatility is currently generating about 0.02 per unit of risk. If you would invest  1,276  in Amg River Road on September 14, 2024 and sell it today you would earn a total of  279.00  from holding Amg River Road or generate 21.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Amg River Road  vs.  Lsv Managed Volatility

Amg River Road

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amg River Road are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Amg River is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lsv Managed Volatility

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Managed Volatility are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Lsv Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amg River and Lsv Managed

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

The idea behind Amg River Road and Lsv Managed Volatility 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.