Correlation Between Copeland Risk and Amg Managers

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

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

Diversification Opportunities for Copeland Risk and Amg Managers

0.27

Correlation Coefficient

Copeland Risk  Amg Managers

Modest diversification

The 3 months correlation between Copeland and Amg is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed and Amg Managers Skyline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Skyline and Copeland Risk 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 Copeland Risk Managed 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 Skyline has no effect on the direction of Copeland Risk i.e., Copeland Risk and Amg Managers go up and down completely randomly.

Pair Corralation between Copeland Risk and Amg Managers

Assuming the 90 days horizon Copeland Risk Managed is expected to under-perform the Amg Managers. In addition to that, Copeland Risk is 1.08 times more volatile than Amg Managers Skyline. It trades about -0.11 of its total potential returns per unit of risk. Amg Managers Skyline is currently generating about -0.02 per unit of volatility. If you would invest  3,128  in Amg Managers Skyline on September 26, 2024 and sell it today you would lose (92.00) from holding Amg Managers Skyline or give up 2.94% of portfolio value over 90 days.

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

Copeland Risk Managed  vs.  Amg Managers Skyline

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Amg Managers Skyline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Managers Skyline has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Amg Managers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Copeland Risk and Amg Managers

The main advantage of trading using opposite Copeland Risk and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copeland Risk 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.

The idea behind Copeland Risk Managed and Amg Managers Skyline 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..