Correlation Between Amg Southernsun and Intrepid Endurance

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

By analyzing existing cross correlation between Amg Southernsun Small and Intrepid Endurance Fund, you can compare the effects of market volatilities on Amg Southernsun and Intrepid Endurance 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 Southernsun with a short position of Intrepid Endurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Southernsun and Intrepid Endurance.

Diversification Opportunities for Amg Southernsun and Intrepid Endurance

0.25

Correlation Coefficient

Amg Southernsun  Intrepid Endurance

Modest diversification

The 3 months correlation between Amg and Intrepid is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amg Southernsun Small and Intrepid Endurance Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Endurance and Amg Southernsun 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 Southernsun Small are associated (or correlated) with Intrepid Endurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Endurance has no effect on the direction of Amg Southernsun i.e., Amg Southernsun and Intrepid Endurance go up and down completely randomly.

Pair Corralation between Amg Southernsun and Intrepid Endurance

Assuming the 90 days horizon Amg Southernsun Small is expected to generate 1.39 times more return on investment than Intrepid Endurance. However, Amg Southernsun is 1.39 times more volatile than Intrepid Endurance Fund. It trades about 0.09 of its potential returns per unit of risk. Intrepid Endurance Fund is currently generating about 0.04 per unit of risk. If you would invest  2,848  in Amg Southernsun Small on September 3, 2024 and sell it today you would earn a total of  185.00  from holding Amg Southernsun Small or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Amg Southernsun Small  vs.  Intrepid Endurance Fund

Amg Southernsun Small

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Southernsun Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Amg Southernsun may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intrepid Endurance

Risk-Adjusted Performance

3 of 100

Insignificant

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

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

The idea behind Amg Southernsun Small and Intrepid Endurance Fund 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.