Correlation Between Select Fund and Amg Renaissance
Can any of the company-specific risk be diversified away by investing in both Select Fund and Amg Renaissance 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 Select Fund and Amg Renaissance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Fund C and Amg Renaissance Large, you can compare the effects of market volatilities on Select Fund and Amg Renaissance 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 Select Fund with a short position of Amg Renaissance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Amg Renaissance.
Diversification Opportunities for Select Fund and Amg Renaissance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Select and Amg is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund C and Amg Renaissance Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Renaissance Large and Select Fund 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 Select Fund C are associated (or correlated) with Amg Renaissance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Renaissance Large has no effect on the direction of Select Fund i.e., Select Fund and Amg Renaissance go up and down completely randomly.
Pair Corralation between Select Fund and Amg Renaissance
Assuming the 90 days horizon Select Fund C is expected to generate 1.03 times more return on investment than Amg Renaissance. However, Select Fund is 1.03 times more volatile than Amg Renaissance Large. It trades about 0.09 of its potential returns per unit of risk. Amg Renaissance Large is currently generating about 0.07 per unit of risk. If you would invest 5,860 in Select Fund C on September 25, 2024 and sell it today you would earn a total of 3,564 from holding Select Fund C or generate 60.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Select Fund C vs. Amg Renaissance Large
Performance |
Timeline |
Select Fund C |
Amg Renaissance Large |
Select Fund and Amg Renaissance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Fund and Amg Renaissance
The main advantage of trading using opposite Select Fund and Amg Renaissance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund position performs unexpectedly, Amg Renaissance 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 Renaissance will offset losses from the drop in Amg Renaissance's long position.Select Fund vs. Sustainable Equity Fund | Select Fund vs. Small Cap Growth | Select Fund vs. Emerging Markets Fund | Select Fund vs. Heritage Fund Investor |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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