Correlation Between American Mutual and Smead Value
Can any of the company-specific risk be diversified away by investing in both American Mutual and Smead 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 Smead 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 Smead Value Fund, you can compare the effects of market volatilities on American Mutual and Smead 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 Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Smead Value.
Diversification Opportunities for American Mutual and Smead Value
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Smead is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead 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 Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of American Mutual i.e., American Mutual and Smead Value go up and down completely randomly.
Pair Corralation between American Mutual and Smead Value
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.61 times more return on investment than Smead Value. However, American Mutual Fund is 1.65 times less risky than Smead Value. It trades about -0.13 of its potential returns per unit of risk. Smead Value Fund is currently generating about -0.15 per unit of risk. If you would invest 6,013 in American Mutual Fund on September 12, 2024 and sell it today you would lose (77.00) from holding American Mutual Fund or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Smead Value Fund
Performance |
| Timeline |
| American Mutual |
| Smead Value Fund |
American Mutual and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Smead Value
The main advantage of trading using opposite American Mutual and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Smead 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 Smead Value will offset losses from the drop in Smead Value's long position.| American Mutual vs. Multisector Bond Sma | American Mutual vs. Versatile Bond Portfolio | American Mutual vs. T Rowe Price | American Mutual vs. Franklin High Yield |
| Smead Value vs. Vanguard Value Index | Smead Value vs. Dodge Cox Stock | Smead Value vs. American Mutual Fund | Smead Value vs. American Funds American |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |