Correlation Between Amg Timessquare and Conestoga Small
Can any of the company-specific risk be diversified away by investing in both Amg Timessquare and Conestoga 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 Conestoga 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 Conestoga Small Cap, you can compare the effects of market volatilities on Amg Timessquare and Conestoga 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 Conestoga Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Timessquare and Conestoga Small.
Diversification Opportunities for Amg Timessquare and Conestoga Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Conestoga is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amg Timessquare Mid and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga 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 Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of Amg Timessquare i.e., Amg Timessquare and Conestoga Small go up and down completely randomly.
Pair Corralation between Amg Timessquare and Conestoga Small
Assuming the 90 days horizon Amg Timessquare is expected to generate 1.4 times less return on investment than Conestoga Small. But when comparing it to its historical volatility, Amg Timessquare Mid is 1.42 times less risky than Conestoga Small. It trades about 0.21 of its potential returns per unit of risk. Conestoga Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,160 in Conestoga Small Cap on September 10, 2024 and sell it today you would earn a total of 1,152 from holding Conestoga Small Cap or generate 16.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amg Timessquare Mid vs. Conestoga Small Cap
Performance |
Timeline |
Amg Timessquare Mid |
Conestoga Small Cap |
Amg Timessquare and Conestoga Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amg Timessquare and Conestoga Small
The main advantage of trading using opposite Amg Timessquare and Conestoga Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Timessquare position performs unexpectedly, Conestoga 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 Conestoga Small will offset losses from the drop in Conestoga Small's long position.Amg Timessquare vs. Amg Timessquare Small | Amg Timessquare vs. Amg Timessquare Mid | Amg Timessquare vs. Tcm Small Cap | Amg Timessquare vs. Small Pany Growth |
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Check out your portfolio center.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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