Correlation Between Permanent Portfolio and Amg Yacktman

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

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

Diversification Opportunities for Permanent Portfolio and Amg Yacktman

0.59

Correlation Coefficient

Permanent Portfolio  Amg Yacktman

Very weak diversification

The 3 months correlation between Permanent and Amg is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Permanent Portfolio Class and Amg Yacktman Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman Focused and Permanent Portfolio 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 Permanent Portfolio Class 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 Focused has no effect on the direction of Permanent Portfolio i.e., Permanent Portfolio and Amg Yacktman go up and down completely randomly.

Pair Corralation between Permanent Portfolio and Amg Yacktman

Assuming the 90 days horizon Permanent Portfolio Class is expected to generate 0.63 times more return on investment than Amg Yacktman. However, Permanent Portfolio Class is 1.59 times less risky than Amg Yacktman. It trades about 0.13 of its potential returns per unit of risk. Amg Yacktman Focused is currently generating about 0.01 per unit of risk. If you would invest  4,802  in Permanent Portfolio Class on October 5, 2024 and sell it today you would earn a total of  1,250  from holding Permanent Portfolio Class or generate 26.03% return on investment over 90 days.

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

Permanent Portfolio Class  vs.  Amg Yacktman Focused

Permanent Portfolio Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Permanent Portfolio Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Permanent Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Yacktman Focused

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Yacktman Focused has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Permanent Portfolio and Amg Yacktman

The main advantage of trading using opposite Permanent Portfolio and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permanent Portfolio 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 Permanent Portfolio Class and Amg Yacktman Focused 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.