Correlation Between Amg Timessquare and Astoncrosswind Small

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

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

Diversification Opportunities for Amg Timessquare and Astoncrosswind Small

0.81

Correlation Coefficient

Amg Timessquare  Astoncrosswind Small

Very poor diversification

The 3 months correlation between Amg and Astoncrosswind is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amg Timessquare Mid and Astoncrosswind Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoncrosswind Small Cap and Amg Timessquare 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 Timessquare Mid are associated (or correlated) with Astoncrosswind Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoncrosswind Small Cap has no effect on the direction of Amg Timessquare i.e., Amg Timessquare and Astoncrosswind Small go up and down completely randomly.

Pair Corralation between Amg Timessquare and Astoncrosswind Small

Assuming the 90 days horizon Amg Timessquare is expected to generate 1.16 times less return on investment than Astoncrosswind Small. But when comparing it to its historical volatility, Amg Timessquare Mid is 1.08 times less risky than Astoncrosswind Small. It trades about 0.05 of its potential returns per unit of risk. Astoncrosswind Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,347  in Astoncrosswind Small Cap on September 28, 2024 and sell it today you would earn a total of  388.00  from holding Astoncrosswind Small Cap or generate 28.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Amg Timessquare Mid  vs.  Astoncrosswind Small Cap

Amg Timessquare Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Astoncrosswind Small Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astoncrosswind Small Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Astoncrosswind Small 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 Timessquare and Astoncrosswind Small

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

The idea behind Amg Timessquare Mid and Astoncrosswind Small Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.