Correlation Between Matson Money and Amg Managers

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

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

Diversification Opportunities for Matson Money and Amg Managers

-0.47

Correlation Coefficient

Matson Money  Amg Managers

Very good diversification

The 3 months correlation between Matson and Amg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Amg Managers Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Special and Matson Money 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 Matson Money Equity 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 Special has no effect on the direction of Matson Money i.e., Matson Money and Amg Managers go up and down completely randomly.

Pair Corralation between Matson Money and Amg Managers

Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Amg Managers. In addition to that, Matson Money is 1.07 times more volatile than Amg Managers Special. It trades about -0.35 of its total potential returns per unit of risk. Amg Managers Special is currently generating about -0.06 per unit of volatility. If you would invest  6,853  in Amg Managers Special on September 26, 2024 and sell it today you would lose (75.00) from holding Amg Managers Special or give up 1.09% of portfolio value over 90 days.

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

Matson Money Equity  vs.  Amg Managers Special

Matson Money Equity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Matson Money Equity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Matson Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Managers Special

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Managers Special has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Matson Money and Amg Managers

The main advantage of trading using opposite Matson Money and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money 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 Matson Money Equity and Amg Managers Special 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.