Correlation Between Amg River and Smallcap World

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

By analyzing existing cross correlation between Amg River Road and Smallcap World Fund, you can compare the effects of market volatilities on Amg River and Smallcap World 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 River with a short position of Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Smallcap World.

Diversification Opportunities for Amg River and Smallcap World

0.9

Correlation Coefficient

Amg River  Smallcap World

Almost no diversification

The 3 months correlation between Amg and SMALLCAP is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World and Amg River 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 River Road are associated (or correlated) with Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Amg River i.e., Amg River and Smallcap World go up and down completely randomly.

Pair Corralation between Amg River and Smallcap World

Assuming the 90 days horizon Amg River is expected to generate 2.86 times less return on investment than Smallcap World. In addition to that, Amg River is 1.27 times more volatile than Smallcap World Fund. It trades about 0.04 of its total potential returns per unit of risk. Smallcap World Fund is currently generating about 0.16 per unit of volatility. If you would invest  6,718  in Smallcap World Fund on May 13, 2025 and sell it today you would earn a total of  465.00  from holding Smallcap World Fund or generate 6.92% return on investment over 90 days.

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

Amg River Road  vs.  Smallcap World Fund

Amg River Road

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Amg River Road 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 River is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smallcap World

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap World Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Smallcap World may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Amg River and Smallcap World

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

The idea behind Amg River Road and Smallcap World Fund 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.