Correlation Between AMG Advanced and Mobile Tornado

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

Diversification Opportunities for AMG Advanced and Mobile Tornado

-0.13

Correlation Coefficient

AMG Advanced  Mobile Tornado

Good diversification

The 3 months correlation between AMG and Mobile is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Mobile Tornado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Tornado 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 Mobile Tornado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Tornado Group has no effect on the direction of AMG Advanced i.e., AMG Advanced and Mobile Tornado go up and down completely randomly.

Pair Corralation between AMG Advanced and Mobile Tornado

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Mobile Tornado. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 1.82 times less risky than Mobile Tornado. The stock trades about -0.09 of its potential returns per unit of risk. The Mobile Tornado Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Mobile Tornado Group on October 6, 2024 and sell it today you would lose (5.00) from holding Mobile Tornado Group or give up 3.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Mobile Tornado 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 weak 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.

Mobile Tornado Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Tornado Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mobile Tornado exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMG Advanced and Mobile Tornado

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

The idea behind AMG Advanced Metallurgical and Mobile Tornado 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 Global Correlations module to find global opportunities by holding instruments from different markets.