Correlation Between Balanced Fund and Amg Managers

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

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

Diversification Opportunities for Balanced Fund and Amg Managers

0.66

Correlation Coefficient

Balanced Fund  Amg Managers

Poor diversification

The 3 months correlation between Balanced and Amg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Amg Managers Lmcg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Lmcg and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Lmcg has no effect on the direction of Balanced Fund i.e., Balanced Fund and Amg Managers go up and down completely randomly.

Pair Corralation between Balanced Fund and Amg Managers

Assuming the 90 days horizon Balanced Fund is expected to generate 1.11 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Balanced Fund Investor is 1.95 times less risky than Amg Managers. It trades about 0.1 of its potential returns per unit of risk. Amg Managers Lmcg is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,405  in Amg Managers Lmcg on September 28, 2024 and sell it today you would earn a total of  427.00  from holding Amg Managers Lmcg or generate 30.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Balanced Fund Investor  vs.  Amg Managers Lmcg

Balanced Fund Investor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amg Managers Lmcg

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Managers Lmcg are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Amg Managers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Balanced Fund and Amg Managers

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

The idea behind Balanced Fund Investor and Amg Managers Lmcg 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.