Correlation Between American Mutual and Eic Value
Can any of the company-specific risk be diversified away by investing in both American Mutual and Eic Value 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 Mutual and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Eic Value Fund, you can compare the effects of market volatilities on American Mutual and Eic Value 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 Mutual with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Eic Value.
Diversification Opportunities for American Mutual and Eic Value
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Eic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and American Mutual 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 Mutual Fund are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of American Mutual i.e., American Mutual and Eic Value go up and down completely randomly.
Pair Corralation between American Mutual and Eic Value
Assuming the 90 days horizon American Mutual is expected to generate 1.24 times less return on investment than Eic Value. But when comparing it to its historical volatility, American Mutual Fund is 1.01 times less risky than Eic Value. It trades about 0.12 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,875 in Eic Value Fund on August 27, 2024 and sell it today you would earn a total of 39.00 from holding Eic Value Fund or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Eic Value Fund
Performance |
| Timeline |
| American Mutual |
| Eic Value Fund |
American Mutual and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Eic Value
The main advantage of trading using opposite American Mutual and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| American Mutual vs. Qs Large Cap | American Mutual vs. Morgan Stanley Institutional | American Mutual vs. Archer Balanced Fund | American Mutual vs. Volumetric Fund Volumetric |
| Eic Value vs. Nuveen Winslow Large Cap | Eic Value vs. William Blair Large | Eic Value vs. Old Westbury Large | Eic Value vs. Enhanced Large Pany |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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