Correlation Between William Blair and Amg Managers

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

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

Diversification Opportunities for William Blair and Amg Managers

0.6

Correlation Coefficient

William Blair  Amg Managers

Poor diversification

The 3 months correlation between William and Amg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding William Blair International and Amg Managers Centersquare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Centersquare and William Blair 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 William Blair International 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 Centersquare has no effect on the direction of William Blair i.e., William Blair and Amg Managers go up and down completely randomly.

Pair Corralation between William Blair and Amg Managers

Assuming the 90 days horizon William Blair International is expected to generate 0.83 times more return on investment than Amg Managers. However, William Blair International is 1.21 times less risky than Amg Managers. It trades about 0.06 of its potential returns per unit of risk. Amg Managers Centersquare is currently generating about 0.04 per unit of risk. If you would invest  1,211  in William Blair International on December 28, 2024 and sell it today you would earn a total of  39.00  from holding William Blair International or generate 3.22% return on investment over 90 days.

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

William Blair International  vs.  Amg Managers Centersquare

William Blair Intern

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair International are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, William Blair is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Managers Centersquare

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Managers Centersquare are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 William Blair and Amg Managers

The main advantage of trading using opposite William Blair and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair 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 William Blair International and Amg Managers Centersquare 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.