Correlation Between Affiliated Managers and Manning Napier

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

By analyzing existing cross correlation between Affiliated Managers Group and Manning Napier, you can compare the effects of market volatilities on Affiliated Managers and Manning Napier 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 Affiliated Managers with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Manning Napier.

Diversification Opportunities for Affiliated Managers and Manning Napier

-0.29

Correlation Coefficient

Affiliated Managers  Manning Napier

Very good diversification

The 3 months correlation between Affiliated and Manning is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Manning Napier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Manning Napier go up and down completely randomly.

Pair Corralation between Affiliated Managers and Manning Napier

If you would invest  1,285  in Manning Napier on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Manning Napier or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Affiliated Managers Group  vs.  Manning Napier

Affiliated Managers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Affiliated Managers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Manning Napier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manning Napier has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Manning Napier is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Affiliated Managers and Manning Napier

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

The idea behind Affiliated Managers Group and Manning Napier 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.