Correlation Between Advanced Micro and Smead Value
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Smead Value 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 Advanced Micro and Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Smead Value Fund, you can compare the effects of market volatilities on Advanced Micro and Smead Value 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 Advanced Micro with a short position of Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Smead Value.
Diversification Opportunities for Advanced Micro and Smead Value
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Smead is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of Advanced Micro i.e., Advanced Micro and Smead Value go up and down completely randomly.
Pair Corralation between Advanced Micro and Smead Value
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Smead Value. In addition to that, Advanced Micro is 3.02 times more volatile than Smead Value Fund. It trades about -0.12 of its total potential returns per unit of risk. Smead Value Fund is currently generating about -0.11 per unit of volatility. If you would invest 8,375 in Smead Value Fund on February 8, 2024 and sell it today you would lose (213.00) from holding Smead Value Fund or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advanced Micro Devices vs. Smead Value Fund
Performance |
| Timeline |
| Advanced Micro Devices |
| Smead Value Fund |
Advanced Micro and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Smead Value
The main advantage of trading using opposite Advanced Micro and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.| Advanced Micro vs. IF Bancorp | Advanced Micro vs. Merck Company | Advanced Micro vs. The Wendys Co | Advanced Micro vs. Infosys Ltd ADR |
| Smead Value vs. Vanguard Value Index | Smead Value vs. Dodge Cox Stock | Smead Value vs. American Funds American | Smead Value vs. American Funds American |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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