Correlation Between Amg Yacktman and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Amg Yacktman and Amg Southernsun 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 Amg Yacktman and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Yacktman Focused and Amg Southernsun Small, you can compare the effects of market volatilities on Amg Yacktman and Amg Southernsun 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 Amg Yacktman with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Yacktman and Amg Southernsun.
Diversification Opportunities for Amg Yacktman and Amg Southernsun
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amg and Amg is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amg Yacktman Focused and Amg Southernsun Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Small and Amg Yacktman 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 Amg Yacktman Focused are associated (or correlated) with Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Small has no effect on the direction of Amg Yacktman i.e., Amg Yacktman and Amg Southernsun go up and down completely randomly.
Pair Corralation between Amg Yacktman and Amg Southernsun
Assuming the 90 days horizon Amg Yacktman Focused is expected to generate 0.53 times more return on investment than Amg Southernsun. However, Amg Yacktman Focused is 1.89 times less risky than Amg Southernsun. It trades about 0.06 of its potential returns per unit of risk. Amg Southernsun Small is currently generating about 0.0 per unit of risk. If you would invest 1,763 in Amg Yacktman Focused on August 26, 2024 and sell it today you would earn a total of 385.00 from holding Amg Yacktman Focused or generate 21.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Yacktman Focused vs. Amg Southernsun Small
Performance |
| Timeline |
| Amg Yacktman Focused |
| Amg Southernsun Small |
Amg Yacktman and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Yacktman and Amg Southernsun
The main advantage of trading using opposite Amg Yacktman and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Yacktman position performs unexpectedly, Amg Southernsun 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 Southernsun will offset losses from the drop in Amg Southernsun's long position.| Amg Yacktman vs. Amg Yacktman Fund | Amg Yacktman vs. Permanent Portfolio Class | Amg Yacktman vs. Oakmark International Fund | Amg Yacktman vs. Intrepid Endurance Fund |
| Amg Southernsun vs. Hodges Small Cap | Amg Southernsun vs. Walthausen Small Cap | Amg Southernsun vs. Matthew 25 Fund | Amg Southernsun vs. Amg Yacktman Focused |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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