Correlation Between Biglari Holdings and Amg Gwk

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

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

Diversification Opportunities for Biglari Holdings and Amg Gwk

-0.34

Correlation Coefficient

Biglari Holdings  Amg Gwk

Very good diversification

The 3 months correlation between Biglari and Amg is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Amg Gwk E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk E and Biglari Holdings 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 Biglari Holdings 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 E has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Amg Gwk go up and down completely randomly.

Pair Corralation between Biglari Holdings and Amg Gwk

Allowing for the 90-day total investment horizon Biglari Holdings is expected to under-perform the Amg Gwk. In addition to that, Biglari Holdings is 7.87 times more volatile than Amg Gwk E. It trades about -0.13 of its total potential returns per unit of risk. Amg Gwk E is currently generating about 0.11 per unit of volatility. If you would invest  878.00  in Amg Gwk E on December 26, 2024 and sell it today you would earn a total of  18.00  from holding Amg Gwk E or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Biglari Holdings  vs.  Amg Gwk E

Biglari Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biglari Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Amg Gwk E

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk E are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Biglari Holdings and Amg Gwk

The main advantage of trading using opposite Biglari Holdings and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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 Biglari Holdings and Amg Gwk E 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.