Correlation Between Nasdaq 100 and Amg Gwk

Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Amg Gwk 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 Nasdaq 100 and Amg Gwk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 Index Fund and Amg Gwk Small, you can compare the effects of market volatilities on Nasdaq 100 and Amg Gwk 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 Nasdaq 100 with a short position of Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Amg Gwk.

Diversification Opportunities for Nasdaq 100 and Amg Gwk

0.47

Correlation Coefficient

Nasdaq 100  Amg Gwk

Very weak diversification

The 3 months correlation between Nasdaq and Amg is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Amg Gwk go up and down completely randomly.

Pair Corralation between Nasdaq 100 and Amg Gwk

Assuming the 90 days horizon Nasdaq 100 is expected to generate 3.2 times less return on investment than Amg Gwk. In addition to that, Nasdaq 100 is 1.07 times more volatile than Amg Gwk Small. It trades about 0.04 of its total potential returns per unit of risk. Amg Gwk Small is currently generating about 0.15 per unit of volatility. If you would invest  3,301  in Amg Gwk Small on September 13, 2024 and sell it today you would earn a total of  376.00  from holding Amg Gwk Small or generate 11.39% return on investment over 90 days.

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

Nasdaq 100 Index Fund  vs.  Amg Gwk Small

Nasdaq 100 Index

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Index Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Nasdaq 100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Gwk Small

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk Small are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Amg Gwk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nasdaq 100 and Amg Gwk

The main advantage of trading using opposite Nasdaq 100 and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Amg Gwk 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 Gwk will offset losses from the drop in Amg Gwk's long position.

The idea behind Nasdaq 100 Index Fund and Amg Gwk Small 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.