Correlation Between Amg Managers and West Loop

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

Diversification Opportunities for Amg Managers and West Loop

0.75

Correlation Coefficient

Amg Managers  West Loop

Poor diversification

The 3 months correlation between Amg and West is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and West Loop Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Loop Realty 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 West Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Loop Realty has no effect on the direction of Amg Managers i.e., Amg Managers and West Loop go up and down completely randomly.

Pair Corralation between Amg Managers and West Loop

Assuming the 90 days horizon Amg Managers is expected to generate 1.93 times less return on investment than West Loop. But when comparing it to its historical volatility, Amg Managers Centersquare is 1.02 times less risky than West Loop. It trades about 0.02 of its potential returns per unit of risk. West Loop Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,221  in West Loop Realty on December 27, 2024 and sell it today you would earn a total of  33.00  from holding West Loop Realty or generate 2.7% 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.  West Loop Realty

Amg Managers Centersquare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Managers Centersquare are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

West Loop Realty

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in West Loop Realty are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, West Loop 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 West Loop

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

The idea behind Amg Managers Centersquare and West Loop Realty 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.