Correlation Between Cardano and Amg Gwk

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

By analyzing existing cross correlation between Cardano and Amg Gwk Municipal, you can compare the effects of market volatilities on Cardano and Amg Gwk 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 Cardano with a short position of Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Amg Gwk.

Diversification Opportunities for Cardano and Amg Gwk

0.32

Correlation Coefficient

Cardano  Amg Gwk

Weak diversification

The 3 months correlation between Cardano and AMG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Amg Gwk Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Municipal and Cardano 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 Cardano are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Municipal has no effect on the direction of Cardano i.e., Cardano and Amg Gwk go up and down completely randomly.

Pair Corralation between Cardano and Amg Gwk

Assuming the 90 days trading horizon Cardano is expected to generate 26.86 times more return on investment than Amg Gwk. However, Cardano is 26.86 times more volatile than Amg Gwk Municipal. It trades about 0.2 of its potential returns per unit of risk. Amg Gwk Municipal is currently generating about -0.07 per unit of risk. If you would invest  38.00  in Cardano on October 24, 2024 and sell it today you would earn a total of  63.00  from holding Cardano or generate 165.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.29%
Values	Daily Returns

Cardano  vs.  Amg Gwk Municipal

Cardano

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amg Gwk Municipal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk Municipal are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amg Gwk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and Amg Gwk

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

The idea behind Cardano and Amg Gwk Municipal 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.