Correlation Between American Balanced and FG Merger
Can any of the company-specific risk be diversified away by investing in both American Balanced and FG Merger 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 American Balanced and FG Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and FG Merger Corp, you can compare the effects of market volatilities on American Balanced and FG Merger 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 American Balanced with a short position of FG Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and FG Merger.
Diversification Opportunities for American Balanced and FG Merger
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and FGMC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and FG Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Merger Corp and American Balanced 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 American Balanced are associated (or correlated) with FG Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Merger Corp has no effect on the direction of American Balanced i.e., American Balanced and FG Merger go up and down completely randomly.
Pair Corralation between American Balanced and FG Merger
If you would invest 3,439 in American Balanced on November 3, 2024 and sell it today you would earn a total of 94.00 from holding American Balanced or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
American Balanced vs. FG Merger Corp
Performance |
| Timeline |
| American Balanced |
| FG Merger Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Balanced and FG Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and FG Merger
The main advantage of trading using opposite American Balanced and FG Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, FG Merger 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 FG Merger will offset losses from the drop in FG Merger's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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