Correlation Between RTW Venture and AMG Advanced

Can any of the company-specific risk be diversified away by investing in both RTW Venture and AMG Advanced 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 RTW Venture and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RTW Venture Fund and AMG Advanced Metallurgical, you can compare the effects of market volatilities on RTW Venture and AMG Advanced 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 RTW Venture with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and AMG Advanced.

Diversification Opportunities for RTW Venture and AMG Advanced

-0.43

Correlation Coefficient

RTW Venture  AMG Advanced

Very good diversification

The 3 months correlation between RTW and AMG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and RTW Venture 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 RTW Venture Fund are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of RTW Venture i.e., RTW Venture and AMG Advanced go up and down completely randomly.

Pair Corralation between RTW Venture and AMG Advanced

Assuming the 90 days trading horizon RTW Venture Fund is expected to under-perform the AMG Advanced. But the stock apears to be less risky and, when comparing its historical volatility, RTW Venture Fund is 2.94 times less risky than AMG Advanced. The stock trades about -0.15 of its potential returns per unit of risk. The AMG Advanced Metallurgical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,373  in AMG Advanced Metallurgical on December 29, 2024 and sell it today you would earn a total of  190.00  from holding AMG Advanced Metallurgical or generate 13.84% return on investment over 90 days.

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

RTW Venture Fund  vs.  AMG Advanced Metallurgical

RTW Venture Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days RTW Venture Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AMG Advanced Metallu

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RTW Venture and AMG Advanced

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

The idea behind RTW Venture Fund and AMG Advanced Metallurgical 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.