Correlation Between Knights Of and Amg Yacktman

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Can any of the company-specific risk be diversified away by investing in both Knights Of 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 Knights Of and Amg Yacktman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knights Of Umbus and Amg Yacktman Fund, you can compare the effects of market volatilities on Knights Of 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 Knights Of with a short position of Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knights Of and Amg Yacktman.

Diversification Opportunities for Knights Of and Amg Yacktman

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Knights and Amg is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Knights Of Umbus and Amg Yacktman Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman and Knights Of 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 Knights Of Umbus 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 Knights Of i.e., Knights Of and Amg Yacktman go up and down completely randomly.

Pair Corralation between Knights Of and Amg Yacktman

Assuming the 90 days horizon Knights Of Umbus is expected to generate 1.79 times more return on investment than Amg Yacktman. However, Knights Of is 1.79 times more volatile than Amg Yacktman Fund. It trades about 0.09 of its potential returns per unit of risk. Amg Yacktman Fund is currently generating about 0.05 per unit of risk. If you would invest  2,341  in Knights Of Umbus on August 27, 2025 and sell it today you would earn a total of  117.00  from holding Knights Of Umbus or generate 5.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Knights Of Umbus  vs.  Amg Yacktman Fund

 Performance 
       Timeline  
Knights Of Umbus 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Knights Of Umbus are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Knights Of 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

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Amg Yacktman Fund are ranked lower than 3 (%) 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.

Knights Of and Amg Yacktman Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Knights Of and Amg Yacktman

The main advantage of trading using opposite Knights Of and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knights Of 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 Knights Of Umbus 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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