Correlation Between Barings Active and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Amg Yacktman Special, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Amg Yacktman.
Diversification Opportunities for Barings Active and Amg Yacktman
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Amg is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Amg Yacktman Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman Special and Barings Active 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 Barings Active Short 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 Special has no effect on the direction of Barings Active i.e., Barings Active and Amg Yacktman go up and down completely randomly.
Pair Corralation between Barings Active and Amg Yacktman
Assuming the 90 days horizon Barings Active is expected to generate 1.79 times less return on investment than Amg Yacktman. But when comparing it to its historical volatility, Barings Active Short is 5.6 times less risky than Amg Yacktman. It trades about 0.1 of its potential returns per unit of risk. Amg Yacktman Special is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Amg Yacktman Special on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Amg Yacktman Special or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Barings Active Short vs. Amg Yacktman Special
Performance |
| Timeline |
| Barings Active Short |
| Amg Yacktman Special |
Barings Active and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Amg Yacktman
The main advantage of trading using opposite Barings Active and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Pax High Yield | Barings Active vs. Jpmorgan High Yield | Barings Active vs. Msift High Yield | Barings Active vs. City National Rochdale |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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