Correlation Between AMG Advanced and Everyman Media

Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Everyman Media 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 Everyman Media 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 Everyman Media Group, you can compare the effects of market volatilities on AMG Advanced and Everyman Media 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 Everyman Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Everyman Media.

Diversification Opportunities for AMG Advanced and Everyman Media

0.51

Correlation Coefficient

AMG Advanced  Everyman Media

Very weak diversification

The 3 months correlation between AMG and Everyman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Everyman Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everyman Media Group 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 Everyman Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everyman Media Group has no effect on the direction of AMG Advanced i.e., AMG Advanced and Everyman Media go up and down completely randomly.

Pair Corralation between AMG Advanced and Everyman Media

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Everyman Media. In addition to that, AMG Advanced is 2.71 times more volatile than Everyman Media Group. It trades about -0.11 of its total potential returns per unit of risk. Everyman Media Group is currently generating about -0.08 per unit of volatility. If you would invest  5,300  in Everyman Media Group on October 11, 2024 and sell it today you would lose (50.00) from holding Everyman Media Group or give up 0.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Everyman Media Group

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Everyman Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everyman Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AMG Advanced and Everyman Media

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

The idea behind AMG Advanced Metallurgical and Everyman Media 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.