Correlation Between American Mutual and Matrix Advisors
Can any of the company-specific risk be diversified away by investing in both American Mutual and Matrix Advisors 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 Matrix Advisors 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 Matrix Advisors Value, you can compare the effects of market volatilities on American Mutual and Matrix Advisors 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 Matrix Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Matrix Advisors.
Diversification Opportunities for American Mutual and Matrix Advisors
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Matrix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Matrix Advisors Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix Advisors Value 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 Matrix Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix Advisors Value has no effect on the direction of American Mutual i.e., American Mutual and Matrix Advisors go up and down completely randomly.
Pair Corralation between American Mutual and Matrix Advisors
Assuming the 90 days horizon American Mutual is expected to generate 1.63 times less return on investment than Matrix Advisors. But when comparing it to its historical volatility, American Mutual Fund is 1.65 times less risky than Matrix Advisors. It trades about 0.27 of its potential returns per unit of risk. Matrix Advisors Value is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 10,227 in Matrix Advisors Value on September 1, 2024 and sell it today you would earn a total of 617.00 from holding Matrix Advisors Value or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Mutual Fund vs. Matrix Advisors Value
Performance |
| Timeline |
| American Mutual |
| Matrix Advisors Value |
American Mutual and Matrix Advisors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Matrix Advisors
The main advantage of trading using opposite American Mutual and Matrix Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Matrix Advisors 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 Matrix Advisors will offset losses from the drop in Matrix Advisors' long position.| American Mutual vs. Balanced Fund Investor | American Mutual vs. Qs Growth Fund | American Mutual vs. Shelton Funds | American Mutual vs. Small Cap Stock |
| Matrix Advisors vs. Madison Investors Fund | Matrix Advisors vs. Sound Shore Fund | Matrix Advisors vs. Fam Value Fund | Matrix Advisors vs. The Jensen Portfolio |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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