Correlation Between Fpa Crescent and Amg Yacktman

Can any of the company-specific risk be diversified away by investing in both Fpa Crescent 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 Fpa Crescent and Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fpa Crescent Fund and Amg Yacktman Fund, you can compare the effects of market volatilities on Fpa Crescent 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 Fpa Crescent with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fpa Crescent and Amg Yacktman.

Diversification Opportunities for Fpa Crescent and Amg Yacktman

0.78

Correlation Coefficient

Fpa Crescent  Amg Yacktman

Poor diversification

The 3 months correlation between Fpa and Amg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fpa Crescent 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 Fpa Crescent 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 Fpa Crescent 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 Fpa Crescent i.e., Fpa Crescent and Amg Yacktman go up and down completely randomly.

Pair Corralation between Fpa Crescent and Amg Yacktman

Assuming the 90 days horizon Fpa Crescent is expected to generate 1.38 times less return on investment than Amg Yacktman. But when comparing it to its historical volatility, Fpa Crescent Fund is 1.07 times less risky than Amg Yacktman. It trades about 0.03 of its potential returns per unit of risk. Amg Yacktman Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,260  in Amg Yacktman Fund on December 26, 2024 and sell it today you would earn a total of  33.00  from holding Amg Yacktman Fund or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fpa Crescent Fund  vs.  Amg Yacktman Fund

Fpa Crescent

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa Crescent Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fpa Crescent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Yacktman

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Yacktman Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Amg Yacktman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fpa Crescent and Amg Yacktman

The main advantage of trading using opposite Fpa Crescent and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fpa Crescent 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 idea behind Fpa Crescent Fund and Amg Yacktman Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.