Correlation Between Amg Managers and Gabelli Equity

Can any of the company-specific risk be diversified away by investing in both Amg Managers and Gabelli Equity 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 Gabelli Equity 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 The Gabelli Equity, you can compare the effects of market volatilities on Amg Managers and Gabelli Equity 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 Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Gabelli Equity.

Diversification Opportunities for Amg Managers and Gabelli Equity

0.76

Correlation Coefficient

Amg Managers  Gabelli Equity

Poor diversification

The 3 months correlation between Amg and Gabelli is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity 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 Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Amg Managers i.e., Amg Managers and Gabelli Equity go up and down completely randomly.

Pair Corralation between Amg Managers and Gabelli Equity

Assuming the 90 days horizon Amg Managers is expected to generate 5.28 times less return on investment than Gabelli Equity. In addition to that, Amg Managers is 1.54 times more volatile than The Gabelli Equity. It trades about 0.02 of its total potential returns per unit of risk. The Gabelli Equity is currently generating about 0.19 per unit of volatility. If you would invest  751.00  in The Gabelli Equity on October 22, 2024 and sell it today you would earn a total of  18.00  from holding The Gabelli Equity or generate 2.4% return on investment over 90 days.

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

Amg Managers Centersquare  vs.  The Gabelli Equity

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.

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Gabelli Equity 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 Gabelli Equity

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

The idea behind Amg Managers Centersquare and The Gabelli Equity 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.