Correlation Between American Balanced and PRINCIPAL
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By analyzing existing cross correlation between American Balanced and PRINCIPAL FINL GROUP, you can compare the effects of market volatilities on American Balanced and PRINCIPAL 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 PRINCIPAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and PRINCIPAL.
Diversification Opportunities for American Balanced and PRINCIPAL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and PRINCIPAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and PRINCIPAL FINL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRINCIPAL FINL GROUP 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 PRINCIPAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRINCIPAL FINL GROUP has no effect on the direction of American Balanced i.e., American Balanced and PRINCIPAL go up and down completely randomly.
Pair Corralation between American Balanced and PRINCIPAL
Assuming the 90 days horizon American Balanced is expected to generate 0.57 times more return on investment than PRINCIPAL. However, American Balanced is 1.75 times less risky than PRINCIPAL. It trades about 0.11 of its potential returns per unit of risk. PRINCIPAL FINL GROUP is currently generating about -0.04 per unit of risk. If you would invest 3,030 in American Balanced on October 24, 2024 and sell it today you would earn a total of 504.00 from holding American Balanced or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.38% |
| Values | Daily Returns |
American Balanced vs. PRINCIPAL FINL GROUP
Performance |
| Timeline |
| American Balanced |
| PRINCIPAL FINL GROUP |
American Balanced and PRINCIPAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and PRINCIPAL
The main advantage of trading using opposite American Balanced and PRINCIPAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, PRINCIPAL 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 PRINCIPAL will offset losses from the drop in PRINCIPAL'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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