Correlation Between American Mutual and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both American Mutual and Amg Yacktman 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 American Mutual and Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Amg Yacktman Fund, you can compare the effects of market volatilities on American Mutual and Amg Yacktman 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 American Mutual with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Amg Yacktman.
Diversification Opportunities for American Mutual and Amg Yacktman
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and AMG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Amg Yacktman Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman and American Mutual 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 American Mutual Fund are associated (or correlated) with Amg Yacktman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Yacktman has no effect on the direction of American Mutual i.e., American Mutual and Amg Yacktman go up and down completely randomly.
Pair Corralation between American Mutual and Amg Yacktman
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.95 times more return on investment than Amg Yacktman. However, American Mutual Fund is 1.05 times less risky than Amg Yacktman. It trades about 0.16 of its potential returns per unit of risk. Amg Yacktman Fund is currently generating about 0.11 per unit of risk. If you would invest 4,837 in American Mutual Fund on September 2, 2024 and sell it today you would earn a total of 1,221 from holding American Mutual Fund or generate 25.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Amg Yacktman Fund
Performance |
| Timeline |
| American Mutual |
| Amg Yacktman |
American Mutual and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Amg Yacktman
The main advantage of trading using opposite American Mutual and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Amg Yacktman 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 Amg Yacktman will offset losses from the drop in Amg Yacktman's long position.| American Mutual vs. California Bond Fund | American Mutual vs. Bbh Intermediate Municipal | American Mutual vs. Ultra Short Fixed Income | American Mutual vs. Ambrus Core Bond |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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