Correlation Between AMTD IDEA and Associated Capital
Can any of the company-specific risk be diversified away by investing in both AMTD IDEA and Associated Capital 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 AMTD IDEA and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMTD IDEA Group and Associated Capital Group, you can compare the effects of market volatilities on AMTD IDEA and Associated Capital 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 AMTD IDEA with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMTD IDEA and Associated Capital.
Diversification Opportunities for AMTD IDEA and Associated Capital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMTD and Associated is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding AMTD IDEA Group and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and AMTD IDEA 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 AMTD IDEA Group are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of AMTD IDEA i.e., AMTD IDEA and Associated Capital go up and down completely randomly.
Pair Corralation between AMTD IDEA and Associated Capital
Given the investment horizon of 90 days AMTD IDEA Group is expected to generate 3.97 times more return on investment than Associated Capital. However, AMTD IDEA is 3.97 times more volatile than Associated Capital Group. It trades about 0.04 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.15 per unit of risk. If you would invest 174.00 in AMTD IDEA Group on January 26, 2024 and sell it today you would earn a total of 3.00 from holding AMTD IDEA Group or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AMTD IDEA Group vs. Associated Capital Group
Performance |
| Timeline |
| AMTD IDEA Group |
| Associated Capital |
AMTD IDEA and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMTD IDEA and Associated Capital
The main advantage of trading using opposite AMTD IDEA and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD IDEA position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| AMTD IDEA vs. Invesco Plc | AMTD IDEA vs. Franklin Resources | AMTD IDEA vs. T Rowe Price | AMTD IDEA vs. SEI Investments |
| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. AssetMark Financial Holdings | Associated Capital vs. Blackrock Muni Intermediate |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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