Correlation Between Amg Managers and Invesco Growth

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

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

Diversification Opportunities for Amg Managers and Invesco Growth

0.7

Correlation Coefficient

Amg Managers  Invesco Growth

Poor diversification

The 3 months correlation between Amg and Invesco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Invesco Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Growth And and Amg Managers 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 Amg Managers Centersquare are associated (or correlated) with Invesco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Growth And has no effect on the direction of Amg Managers i.e., Amg Managers and Invesco Growth go up and down completely randomly.

Pair Corralation between Amg Managers and Invesco Growth

Assuming the 90 days horizon Amg Managers Centersquare is expected to generate 0.65 times more return on investment than Invesco Growth. However, Amg Managers Centersquare is 1.53 times less risky than Invesco Growth. It trades about -0.08 of its potential returns per unit of risk. Invesco Growth And is currently generating about -0.19 per unit of risk. If you would invest  1,186  in Amg Managers Centersquare on October 7, 2024 and sell it today you would lose (43.00) from holding Amg Managers Centersquare or give up 3.63% of portfolio value over 90 days.

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

Amg Managers Centersquare  vs.  Invesco Growth And

Amg Managers Centersquare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Managers Centersquare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Amg Managers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Growth And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Invesco Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amg Managers and Invesco Growth

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

The idea behind Amg Managers Centersquare and Invesco Growth And 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.