Correlation Between Via Renewables and Affiliated Managers

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

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

Diversification Opportunities for Via Renewables and Affiliated Managers

0.04

Correlation Coefficient

Via Renewables  Affiliated Managers

Significant diversification

The 3 months correlation between Via and Affiliated is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Via Renewables 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 Via Renewables are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Via Renewables i.e., Via Renewables and Affiliated Managers go up and down completely randomly.

Pair Corralation between Via Renewables and Affiliated Managers

Assuming the 90 days horizon Via Renewables is expected to generate 0.5 times more return on investment than Affiliated Managers. However, Via Renewables is 2.02 times less risky than Affiliated Managers. It trades about 0.33 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.06 per unit of risk. If you would invest  1,959  in Via Renewables on September 30, 2024 and sell it today you would earn a total of  399.00  from holding Via Renewables or generate 20.37% return on investment over 90 days.

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

Via Renewables  vs.  Affiliated Managers Group

Via Renewables

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Affiliated Managers

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, Affiliated Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Via Renewables and Affiliated Managers

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

The idea behind Via Renewables and Affiliated Managers Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.