Correlation Between AMG Advanced and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on AMG Advanced and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Ocean Harvest.
Diversification Opportunities for AMG Advanced and Ocean Harvest
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMG and Ocean is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of AMG Advanced i.e., AMG Advanced and Ocean Harvest go up and down completely randomly.
Pair Corralation between AMG Advanced and Ocean Harvest
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 1.64 times more return on investment than Ocean Harvest. However, AMG Advanced is 1.64 times more volatile than Ocean Harvest Technology. It trades about 0.03 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.24 per unit of risk. If you would invest 1,474 in AMG Advanced Metallurgical on December 5, 2024 and sell it today you would earn a total of 34.00 from holding AMG Advanced Metallurgical or generate 2.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AMG Advanced Metallurgical vs. Ocean Harvest Technology
Performance |
Timeline |
AMG Advanced Metallu |
Ocean Harvest Technology |
AMG Advanced and Ocean Harvest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMG Advanced and Ocean Harvest
The main advantage of trading using opposite AMG Advanced and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.AMG Advanced vs. FC Investment Trust | AMG Advanced vs. Hansa Investment | AMG Advanced vs. Tavistock Investments Plc | AMG Advanced vs. Chrysalis Investments |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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