Correlation Between Amg Yacktman and Fpa Crescent

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

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

Diversification Opportunities for Amg Yacktman and Fpa Crescent

0.87

Correlation Coefficient

Amg Yacktman  Fpa Crescent

Very poor diversification

The 3 months correlation between Amg and Fpa is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amg Yacktman Fund and Fpa Crescent Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Crescent 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 Fund are associated (or correlated) with Fpa Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Crescent has no effect on the direction of Amg Yacktman i.e., Amg Yacktman and Fpa Crescent go up and down completely randomly.

Pair Corralation between Amg Yacktman and Fpa Crescent

Assuming the 90 days horizon Amg Yacktman Fund is expected to under-perform the Fpa Crescent. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amg Yacktman Fund is 1.38 times less risky than Fpa Crescent. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Fpa Crescent Fund is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,255  in Fpa Crescent Fund on November 29, 2024 and sell it today you would lose (142.00) from holding Fpa Crescent Fund or give up 3.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Amg Yacktman Fund  vs.  Fpa Crescent Fund

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Fpa Crescent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fpa Crescent Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Amg Yacktman and Fpa Crescent

The main advantage of trading using opposite Amg Yacktman and Fpa Crescent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Yacktman position performs unexpectedly, Fpa Crescent 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 Fpa Crescent will offset losses from the drop in Fpa Crescent's long position.

The idea behind Amg Yacktman Fund and Fpa Crescent 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.