Correlation Between Jennison Natural and Amg Timessquare

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

By analyzing existing cross correlation between Jennison Natural Resources and Amg Timessquare Emerging, you can compare the effects of market volatilities on Jennison Natural and Amg Timessquare 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 Jennison Natural with a short position of Amg Timessquare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Amg Timessquare.

Diversification Opportunities for Jennison Natural and Amg Timessquare

-0.47

Correlation Coefficient

Jennison Natural  Amg Timessquare

Very good diversification

The 3 months correlation between Jennison and Amg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Amg Timessquare Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Timessquare Emerging and Jennison Natural 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 Jennison Natural Resources are associated (or correlated) with Amg Timessquare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Timessquare Emerging has no effect on the direction of Jennison Natural i.e., Jennison Natural and Amg Timessquare go up and down completely randomly.

Pair Corralation between Jennison Natural and Amg Timessquare

Assuming the 90 days horizon Jennison Natural is expected to generate 11.42 times less return on investment than Amg Timessquare. In addition to that, Jennison Natural is 1.29 times more volatile than Amg Timessquare Emerging. It trades about 0.0 of its total potential returns per unit of risk. Amg Timessquare Emerging is currently generating about 0.01 per unit of volatility. If you would invest  863.00  in Amg Timessquare Emerging on October 9, 2024 and sell it today you would earn a total of  36.00  from holding Amg Timessquare Emerging or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jennison Natural Resources  vs.  Amg Timessquare Emerging

Jennison Natural Res

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amg Timessquare Emerging

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Timessquare Emerging are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amg Timessquare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jennison Natural and Amg Timessquare

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

The idea behind Jennison Natural Resources and Amg Timessquare Emerging 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.