Correlation Between American Mutual and Eagle Growth
Can any of the company-specific risk be diversified away by investing in both American Mutual and Eagle Growth 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 Eagle Growth 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 Eagle Growth Income, you can compare the effects of market volatilities on American Mutual and Eagle Growth 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 Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Eagle Growth.
Diversification Opportunities for American Mutual and Eagle Growth
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Eagle is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth Income 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 Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of American Mutual i.e., American Mutual and Eagle Growth go up and down completely randomly.
Pair Corralation between American Mutual and Eagle Growth
Assuming the 90 days horizon American Mutual is expected to generate 1.47 times less return on investment than Eagle Growth. But when comparing it to its historical volatility, American Mutual Fund is 1.23 times less risky than Eagle Growth. It trades about 0.15 of its potential returns per unit of risk. Eagle Growth Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,277 in Eagle Growth Income on September 2, 2024 and sell it today you would earn a total of 178.00 from holding Eagle Growth Income or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Eagle Growth Income
Performance |
| Timeline |
| American Mutual |
| Eagle Growth Income |
American Mutual and Eagle Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Eagle Growth
The main advantage of trading using opposite American Mutual and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Eagle Growth 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 Eagle Growth will offset losses from the drop in Eagle Growth's long position.| American Mutual vs. California Bond Fund | American Mutual vs. Bbh Intermediate Municipal | American Mutual vs. Ultra Short Fixed Income | American Mutual vs. Ambrus Core Bond |
| Eagle Growth vs. Chartwell Short Duration | Eagle Growth vs. Carillon Chartwell Short | Eagle Growth vs. Chartwell Short Duration | Eagle Growth vs. Carillon Chartwell Short |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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