Correlation Between DP Cap and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both DP Cap and Affiliated Managers 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 DP Cap and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DP Cap Acquisition and Affiliated Managers Group,, you can compare the effects of market volatilities on DP Cap and Affiliated Managers 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 DP Cap with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of DP Cap and Affiliated Managers.
Diversification Opportunities for DP Cap and Affiliated Managers
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DPCS and Affiliated is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding DP Cap Acquisition and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and DP Cap 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 DP Cap Acquisition are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of DP Cap i.e., DP Cap and Affiliated Managers go up and down completely randomly.
Pair Corralation between DP Cap and Affiliated Managers
Given the investment horizon of 90 days DP Cap is expected to generate 1.02 times less return on investment than Affiliated Managers. But when comparing it to its historical volatility, DP Cap Acquisition is 1.83 times less risky than Affiliated Managers. It trades about 0.06 of its potential returns per unit of risk. Affiliated Managers Group, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,348 in Affiliated Managers Group, on September 24, 2024 and sell it today you would earn a total of 281.00 from holding Affiliated Managers Group, or generate 20.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.77% |
Values | Daily Returns |
DP Cap Acquisition vs. Affiliated Managers Group,
Performance |
Timeline |
DP Cap Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Affiliated Managers |
DP Cap and Affiliated Managers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DP Cap and Affiliated Managers
The main advantage of trading using opposite DP Cap and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DP Cap position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.DP Cap vs. A SPAC II | DP Cap vs. Athena Technology Acquisition | DP Cap vs. Hudson Acquisition I | DP Cap vs. Alpha One |
Affiliated Managers vs. Affiliated Managers Group, | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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