Correlation Between American Funds and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both American Funds 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 Funds 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 Funds American and Amg Yacktman Fund, you can compare the effects of market volatilities on American Funds 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 Funds with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Amg Yacktman.
Diversification Opportunities for American Funds and Amg Yacktman
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Amg is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American 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 Funds 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 Funds American 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 Funds i.e., American Funds and Amg Yacktman go up and down completely randomly.
Pair Corralation between American Funds and Amg Yacktman
Assuming the 90 days horizon American Funds American is expected to generate 0.86 times more return on investment than Amg Yacktman. However, American Funds American is 1.16 times less risky than Amg Yacktman. It trades about 0.06 of its potential returns per unit of risk. Amg Yacktman Fund is currently generating about 0.01 per unit of risk. If you would invest 5,735 in American Funds American on November 29, 2024 and sell it today you would earn a total of 34.00 from holding American Funds American or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Amg Yacktman Fund
Performance |
| Timeline |
| American Funds American |
| Amg Yacktman |
American Funds and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Amg Yacktman
The main advantage of trading using opposite American Funds and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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 Funds vs. Fidelity Sai Inflationfocused | American Funds vs. Credit Suisse Multialternative | American Funds vs. Inflation Adjusted Bond Fund | American Funds vs. Aqr Managed Futures |
| Amg Yacktman vs. John Hancock Financial | Amg Yacktman vs. Davis Financial Fund | Amg Yacktman vs. Prudential Financial Services | Amg Yacktman vs. Vanguard Financials Index |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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