Correlation Between Ab Value and Amg Fq

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

By analyzing existing cross correlation between Ab Value Fund and Amg Fq Long Short, you can compare the effects of market volatilities on Ab Value and Amg Fq 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 Ab Value with a short position of Amg Fq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Amg Fq.

Diversification Opportunities for Ab Value and Amg Fq

0.95

Correlation Coefficient

Ab Value  Amg Fq

Almost no diversification

The 3 months correlation between ABVCX and Amg is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Amg Fq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Fq Long and Ab Value 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 Ab Value Fund are associated (or correlated) with Amg Fq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Fq Long has no effect on the direction of Ab Value i.e., Ab Value and Amg Fq go up and down completely randomly.

Pair Corralation between Ab Value and Amg Fq

Assuming the 90 days horizon Ab Value is expected to generate 1.4 times less return on investment than Amg Fq. In addition to that, Ab Value is 1.07 times more volatile than Amg Fq Long Short. It trades about 0.08 of its total potential returns per unit of risk. Amg Fq Long Short is currently generating about 0.13 per unit of volatility. If you would invest  1,407  in Amg Fq Long Short on September 14, 2024 and sell it today you would earn a total of  788.00  from holding Amg Fq Long Short or generate 56.01% return on investment over 90 days.

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

Ab Value Fund  vs.  Amg Fq Long Short

Ab Value Fund

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Fq Long

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Fq Long Short are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Amg Fq is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Value and Amg Fq

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

The idea behind Ab Value Fund and Amg Fq Long Short 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.