Correlation Between Amg Timessquare and Eagle Mid

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

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

Diversification Opportunities for Amg Timessquare and Eagle Mid

0.97

Correlation Coefficient

Amg Timessquare  Eagle Mid

Almost no diversification

The 3 months correlation between Amg and Eagle is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Amg Timessquare Mid and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid Cap and Amg Timessquare 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 Timessquare Mid are associated (or correlated) with Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Amg Timessquare i.e., Amg Timessquare and Eagle Mid go up and down completely randomly.

Pair Corralation between Amg Timessquare and Eagle Mid

Assuming the 90 days horizon Amg Timessquare Mid is expected to generate 0.81 times more return on investment than Eagle Mid. However, Amg Timessquare Mid is 1.24 times less risky than Eagle Mid. It trades about 0.08 of its potential returns per unit of risk. Eagle Mid Cap is currently generating about 0.05 per unit of risk. If you would invest  1,375  in Amg Timessquare Mid on September 14, 2024 and sell it today you would earn a total of  560.00  from holding Amg Timessquare Mid or generate 40.73% return on investment over 90 days.

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

Amg Timessquare Mid  vs.  Eagle Mid Cap

Amg Timessquare Mid

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Timessquare Mid are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Amg Timessquare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eagle Mid Cap

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mid Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eagle Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amg Timessquare and Eagle Mid

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

The idea behind Amg Timessquare Mid and Eagle Mid Cap 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.