Correlation Between Global Opportunities and AMG Advanced

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

By analyzing existing cross correlation between Global Opportunities Trust and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Global Opportunities and AMG Advanced 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 Global Opportunities with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Opportunities and AMG Advanced.

Diversification Opportunities for Global Opportunities and AMG Advanced

0.15

Correlation Coefficient

Global Opportunities  AMG Advanced

Average diversification

The 3 months correlation between Global and AMG is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global Opportunities Trust and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Global Opportunities 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 Global Opportunities Trust are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Global Opportunities i.e., Global Opportunities and AMG Advanced go up and down completely randomly.

Pair Corralation between Global Opportunities and AMG Advanced

Assuming the 90 days trading horizon Global Opportunities Trust is expected to generate 0.52 times more return on investment than AMG Advanced. However, Global Opportunities Trust is 1.93 times less risky than AMG Advanced. It trades about 0.01 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.03 per unit of risk. If you would invest  29,195  in Global Opportunities Trust on October 24, 2024 and sell it today you would earn a total of  405.00  from holding Global Opportunities Trust or generate 1.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Global Opportunities Trust  vs.  AMG Advanced Metallurgical

Global Opportunities

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Opportunities Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AMG Advanced is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Opportunities and AMG Advanced

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

The idea behind Global Opportunities Trust and AMG Advanced Metallurgical 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.