Correlation Between AMG Advanced and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Ecofin Global 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 Advanced and Ecofin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Ecofin Global Utilities, you can compare the effects of market volatilities on AMG Advanced and Ecofin Global 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 Advanced with a short position of Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Ecofin Global.
Diversification Opportunities for AMG Advanced and Ecofin Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMG and Ecofin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities and AMG Advanced 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 Advanced Metallurgical are associated (or correlated) with Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of AMG Advanced i.e., AMG Advanced and Ecofin Global go up and down completely randomly.
Pair Corralation between AMG Advanced and Ecofin Global
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Ecofin Global. In addition to that, AMG Advanced is 1.32 times more volatile than Ecofin Global Utilities. It trades about -0.09 of its total potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.01 per unit of volatility. If you would invest 18,800 in Ecofin Global Utilities on October 6, 2024 and sell it today you would earn a total of 0.00 from holding Ecofin Global Utilities or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AMG Advanced Metallurgical vs. Ecofin Global Utilities
Performance |
Timeline |
AMG Advanced Metallu |
Ecofin Global Utilities |
AMG Advanced and Ecofin Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMG Advanced and Ecofin Global
The main advantage of trading using opposite AMG Advanced and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.AMG Advanced vs. Chocoladefabriken Lindt Spruengli | AMG Advanced vs. National Atomic Co | AMG Advanced vs. OTP Bank Nyrt | AMG Advanced vs. Samsung Electronics Co |
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Check out your portfolio center.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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