Correlation Between AMG Advanced and Vastned Retail

Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Vastned Retail 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 Advanced and Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMG Advanced Metallurgical and Vastned Retail NV, you can compare the effects of market volatilities on AMG Advanced and Vastned Retail 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 Advanced with a short position of Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Vastned Retail.

Diversification Opportunities for AMG Advanced and Vastned Retail

-0.55

Correlation Coefficient

AMG Advanced  Vastned Retail

Excellent diversification

The 3 months correlation between AMG and Vastned is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV and AMG Advanced 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 Advanced Metallurgical are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of AMG Advanced i.e., AMG Advanced and Vastned Retail go up and down completely randomly.

Pair Corralation between AMG Advanced and Vastned Retail

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Vastned Retail. In addition to that, AMG Advanced is 1.55 times more volatile than Vastned Retail NV. It trades about -0.08 of its total potential returns per unit of risk. Vastned Retail NV is currently generating about 0.2 per unit of volatility. If you would invest  2,014  in Vastned Retail NV on March 14, 2024 and sell it today you would earn a total of  371.00  from holding Vastned Retail NV or generate 18.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Vastned Retail NV

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Vastned Retail NV

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vastned Retail NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Vastned Retail sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMG Advanced and Vastned Retail

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

The idea behind AMG Advanced Metallurgical and Vastned Retail NV 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.