Correlation Between Weyerhaeuser and Amg Managers

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

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

Diversification Opportunities for Weyerhaeuser and Amg Managers

0.6

Correlation Coefficient

Weyerhaeuser  Amg Managers

Poor diversification

The 3 months correlation between Weyerhaeuser and Amg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Weyerhaeuser and Amg Managers Centersquare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Centersquare and Weyerhaeuser 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 Weyerhaeuser 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 Centersquare has no effect on the direction of Weyerhaeuser i.e., Weyerhaeuser and Amg Managers go up and down completely randomly.

Pair Corralation between Weyerhaeuser and Amg Managers

Allowing for the 90-day total investment horizon Weyerhaeuser is expected to generate 1.99 times less return on investment than Amg Managers. In addition to that, Weyerhaeuser is 1.24 times more volatile than Amg Managers Centersquare. It trades about 0.02 of its total potential returns per unit of risk. Amg Managers Centersquare is currently generating about 0.04 per unit of volatility. If you would invest  990.00  in Amg Managers Centersquare on September 2, 2024 and sell it today you would earn a total of  250.00  from holding Amg Managers Centersquare or generate 25.25% return on investment over 90 days.

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

Weyerhaeuser  vs.  Amg Managers Centersquare

Weyerhaeuser

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyerhaeuser are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Weyerhaeuser may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amg Managers Centersquare

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Managers Centersquare are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, 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 Weyerhaeuser and Amg Managers

The main advantage of trading using opposite Weyerhaeuser and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyerhaeuser 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 Weyerhaeuser and Amg Managers Centersquare 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.