Correlation Between Amg Gwk and Amg Yacktman

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

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

Diversification Opportunities for Amg Gwk and Amg Yacktman

-0.53

Correlation Coefficient

Amg Gwk  Amg Yacktman

Excellent diversification

The 3 months correlation between Amg and Amg is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Small and Amg Yacktman Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman Special and Amg Gwk 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 Gwk Small 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 Special has no effect on the direction of Amg Gwk i.e., Amg Gwk and Amg Yacktman go up and down completely randomly.

Pair Corralation between Amg Gwk and Amg Yacktman

Assuming the 90 days horizon Amg Gwk Small is expected to under-perform the Amg Yacktman. In addition to that, Amg Gwk is 1.23 times more volatile than Amg Yacktman Special. It trades about -0.08 of its total potential returns per unit of risk. Amg Yacktman Special is currently generating about 0.06 per unit of volatility. If you would invest  1,111  in Amg Yacktman Special on September 12, 2024 and sell it today you would earn a total of  10.00  from holding Amg Yacktman Special or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Amg Gwk Small  vs.  Amg Yacktman Special

Amg Gwk Small

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Amg Gwk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amg Yacktman Special

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Yacktman Special are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, 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 Amg Gwk and Amg Yacktman

The main advantage of trading using opposite Amg Gwk and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk 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 Amg Gwk Small and Amg Yacktman Special 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.