Correlation Between Aegis Value and Third Avenue
Can any of the company-specific risk be diversified away by investing in both Aegis Value and Third Avenue 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 Aegis Value and Third Avenue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegis Value Fund and Third Avenue Real, you can compare the effects of market volatilities on Aegis Value and Third Avenue 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 Aegis Value with a short position of Third Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegis Value and Third Avenue.
Diversification Opportunities for Aegis Value and Third Avenue
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegis and Third is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aegis Value Fund and Third Avenue Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Avenue Real and Aegis Value 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 Aegis Value Fund are associated (or correlated) with Third Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Avenue Real has no effect on the direction of Aegis Value i.e., Aegis Value and Third Avenue go up and down completely randomly.
Pair Corralation between Aegis Value and Third Avenue
Assuming the 90 days horizon Aegis Value is expected to generate 2.75 times less return on investment than Third Avenue. In addition to that, Aegis Value is 1.21 times more volatile than Third Avenue Real. It trades about 0.04 of its total potential returns per unit of risk. Third Avenue Real is currently generating about 0.15 per unit of volatility. If you would invest 2,192 in Third Avenue Real on September 1, 2024 and sell it today you would earn a total of 425.00 from holding Third Avenue Real or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegis Value Fund vs. Third Avenue Real
Performance |
| Timeline |
| Aegis Value Fund |
| Third Avenue Real |
Aegis Value and Third Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegis Value and Third Avenue
The main advantage of trading using opposite Aegis Value and Third Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegis Value position performs unexpectedly, Third Avenue 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 Third Avenue will offset losses from the drop in Third Avenue's long position.| Aegis Value vs. Franklin High Yield | Aegis Value vs. T Rowe Price | Aegis Value vs. Bbh Intermediate Municipal | Aegis Value vs. Transamerica Funds |
| Third Avenue vs. Third Avenue Value | Third Avenue vs. Third Avenue Small Cap | Third Avenue vs. Alpine Realty Income | Third Avenue vs. The Fairholme Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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