Correlation Between American Balanced and Golden House
Can any of the company-specific risk be diversified away by investing in both American Balanced and Golden House 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 Golden House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Golden House, you can compare the effects of market volatilities on American Balanced and Golden House 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 Golden House. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Golden House.
Diversification Opportunities for American Balanced and Golden House
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Golden is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Golden House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden House 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 Golden House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden House has no effect on the direction of American Balanced i.e., American Balanced and Golden House go up and down completely randomly.
Pair Corralation between American Balanced and Golden House
Assuming the 90 days horizon American Balanced is expected to generate 6.69 times less return on investment than Golden House. But when comparing it to its historical volatility, American Balanced is 4.95 times less risky than Golden House. It trades about 0.07 of its potential returns per unit of risk. Golden House is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 197,787 in Golden House on October 24, 2024 and sell it today you would earn a total of 32,113 from holding Golden House or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
American Balanced vs. Golden House
Performance |
| Timeline |
| American Balanced |
| Golden House |
American Balanced and Golden House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Golden House
The main advantage of trading using opposite American Balanced and Golden House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Golden House 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 Golden House will offset losses from the drop in Golden House'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 |
| Golden House vs. Hanan Mor | Golden House vs. IBI Inv House | Golden House vs. E M Computing | Golden House vs. Alony Hetz Properties |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |