Correlation Between Amg Managers and Guidepath Absolute

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

Diversification Opportunities for Amg Managers and Guidepath Absolute

0.61

Correlation Coefficient

Amg Managers  Guidepath Absolute

Poor diversification

The 3 months correlation between Amg and Guidepath is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Guidepath Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Absolute Return 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 Guidepath Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Absolute Return has no effect on the direction of Amg Managers i.e., Amg Managers and Guidepath Absolute go up and down completely randomly.

Pair Corralation between Amg Managers and Guidepath Absolute

Assuming the 90 days horizon Amg Managers Centersquare is expected to under-perform the Guidepath Absolute. In addition to that, Amg Managers is 5.19 times more volatile than Guidepath Absolute Return. It trades about -0.02 of its total potential returns per unit of risk. Guidepath Absolute Return is currently generating about 0.05 per unit of volatility. If you would invest  979.00  in Guidepath Absolute Return on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Guidepath Absolute Return or generate 0.51% 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.  Guidepath Absolute Return

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.

Guidepath Absolute Return

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Absolute Return are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidepath Absolute 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 Guidepath Absolute

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

The idea behind Amg Managers Centersquare and Guidepath Absolute Return 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .