Correlation Between T Rowe and Amg Yacktman

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

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

Diversification Opportunities for T Rowe and Amg Yacktman

0.77

Correlation Coefficient

T Rowe  Amg Yacktman

Poor diversification

The 3 months correlation between TRLGX and Amg is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Amg Yacktman Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman and T Rowe 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 T Rowe Price 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 T Rowe i.e., T Rowe and Amg Yacktman go up and down completely randomly.

Pair Corralation between T Rowe and Amg Yacktman

Assuming the 90 days horizon T Rowe Price is expected to under-perform the Amg Yacktman. In addition to that, T Rowe is 2.14 times more volatile than Amg Yacktman Fund. It trades about -0.09 of its total potential returns per unit of risk. Amg Yacktman Fund is currently generating about -0.11 per unit of volatility. If you would invest  2,358  in Amg Yacktman Fund on December 1, 2024 and sell it today you would lose (84.00) from holding Amg Yacktman Fund or give up 3.56% of portfolio value over 90 days.

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

T Rowe Price  vs.  Amg Yacktman Fund

T Rowe Price

Risk-Adjusted Performance

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Amg Yacktman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amg Yacktman Fund has generated negative risk-adjusted returns adding no value to fund investors. 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 T Rowe and Amg Yacktman

The main advantage of trading using opposite T Rowe and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe 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 T Rowe Price 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.