Correlation Between Astoncrosswind Small and Amg Fq

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

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

Diversification Opportunities for Astoncrosswind Small and Amg Fq

0.95

Correlation Coefficient

Astoncrosswind Small  Amg Fq

Almost no diversification

The 3 months correlation between Astoncrosswind and Amg is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Astoncrosswind Small Cap 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 Astoncrosswind Small 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 Astoncrosswind Small Cap 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 Astoncrosswind Small i.e., Astoncrosswind Small and Amg Fq go up and down completely randomly.

Pair Corralation between Astoncrosswind Small and Amg Fq

Assuming the 90 days horizon Astoncrosswind Small Cap is expected to generate 1.72 times more return on investment than Amg Fq. However, Astoncrosswind Small is 1.72 times more volatile than Amg Fq Long Short. It trades about 0.12 of its potential returns per unit of risk. Amg Fq Long Short is currently generating about 0.17 per unit of risk. If you would invest  1,702  in Astoncrosswind Small Cap on September 13, 2024 and sell it today you would earn a total of  137.00  from holding Astoncrosswind Small Cap or generate 8.05% return on investment over 90 days.

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

Astoncrosswind Small Cap  vs.  Amg Fq Long Short

Astoncrosswind Small Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astoncrosswind Small Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Astoncrosswind Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amg Fq Long

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Fq Long Short are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Amg Fq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Astoncrosswind Small and Amg Fq

The main advantage of trading using opposite Astoncrosswind Small and Amg Fq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astoncrosswind Small 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 Astoncrosswind Small Cap 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.