Correlation Between The Fairholme and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both The Fairholme 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 The Fairholme and Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Fairholme Fund and Amg Yacktman Fund, you can compare the effects of market volatilities on The Fairholme 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 The Fairholme with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Fairholme and Amg Yacktman.
Diversification Opportunities for The Fairholme and Amg Yacktman
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between The and Amg is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Fairholme 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 The Fairholme 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 The Fairholme 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 The Fairholme i.e., The Fairholme and Amg Yacktman go up and down completely randomly.
Pair Corralation between The Fairholme and Amg Yacktman
Assuming the 90 days horizon The Fairholme Fund is expected to generate 2.3 times more return on investment than Amg Yacktman. However, The Fairholme is 2.3 times more volatile than Amg Yacktman Fund. It trades about 0.05 of its potential returns per unit of risk. Amg Yacktman Fund is currently generating about 0.07 per unit of risk. If you would invest 2,327 in The Fairholme Fund on August 26, 2024 and sell it today you would earn a total of 946.00 from holding The Fairholme Fund or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Fairholme Fund vs. Amg Yacktman Fund
Performance |
| Timeline |
| The Fairholme |
| Amg Yacktman |
The Fairholme and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Fairholme and Amg Yacktman
The main advantage of trading using opposite The Fairholme and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Fairholme 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.| The Fairholme vs. The Fairholme Focused | The Fairholme vs. Vanguard Wellington Fund | The Fairholme vs. Vanguard Materials Index | The Fairholme vs. Vanguard Target Retirement |
| Amg Yacktman vs. Amg Southernsun Equity | Amg Yacktman vs. Amg Southernsun Equity | Amg Yacktman vs. Amg Southernsun Small | Amg Yacktman vs. Amg Southernsun Small |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |