Correlation Between Amg Chicago and Amg Managers

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

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

Diversification Opportunities for Amg Chicago and Amg Managers

0.67

Correlation Coefficient

Amg Chicago  Amg Managers

Poor diversification

The 3 months correlation between Amg and Amg is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amg Chicago Equity and Amg Managers Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Global and Amg Chicago 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 Chicago 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 Global has no effect on the direction of Amg Chicago i.e., Amg Chicago and Amg Managers go up and down completely randomly.

Pair Corralation between Amg Chicago and Amg Managers

If you would invest  2,077  in Amg Managers Global on September 2, 2024 and sell it today you would earn a total of  1.00  from holding Amg Managers Global or generate 0.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	11.11%
Values	Daily Returns

Amg Chicago Equity  vs.  Amg Managers Global

Amg Chicago Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amg Managers Global

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Amg Managers Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, 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 Amg Chicago and Amg Managers

The main advantage of trading using opposite Amg Chicago and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Chicago 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 Amg Chicago Equity and Amg Managers Global 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.