Correlation Between Wasatch Large and Amg Yacktman

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

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

Diversification Opportunities for Wasatch Large and Amg Yacktman

0.31

Correlation Coefficient

Wasatch Large  Amg Yacktman

Weak diversification

The 3 months correlation between Wasatch and AMG is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Large Cap and Amg Yacktman Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman and Wasatch Large 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 Wasatch Large Cap 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 Wasatch Large i.e., Wasatch Large and Amg Yacktman go up and down completely randomly.

Pair Corralation between Wasatch Large and Amg Yacktman

Assuming the 90 days horizon Wasatch Large is expected to generate 2.7 times less return on investment than Amg Yacktman. But when comparing it to its historical volatility, Wasatch Large Cap is 1.06 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 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,531  in Amg Yacktman Fund on August 31, 2024 and sell it today you would earn a total of  58.00  from holding Amg Yacktman Fund or generate 2.29% return on investment over 90 days.

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

Wasatch Large Cap  vs.  Amg Yacktman Fund

Wasatch Large Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wasatch Large 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

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Yacktman Fund are ranked lower than 5 (%) 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 Wasatch Large and Amg Yacktman

The main advantage of trading using opposite Wasatch Large and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Large 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 Wasatch Large Cap 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.