Correlation Between Growth Fund and American Assets
Can any of the company-specific risk be diversified away by investing in both Growth Fund and American Assets 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 Growth Fund and American Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and American Assets Trust, you can compare the effects of market volatilities on Growth Fund and American Assets 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 Growth Fund with a short position of American Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and American Assets.
Diversification Opportunities for Growth Fund and American Assets
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and American is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and American Assets Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Assets Trust and Growth Fund 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 Growth Fund Of are associated (or correlated) with American Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Assets Trust has no effect on the direction of Growth Fund i.e., Growth Fund and American Assets go up and down completely randomly.
Pair Corralation between Growth Fund and American Assets
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.66 times more return on investment than American Assets. However, Growth Fund Of is 1.52 times less risky than American Assets. It trades about 0.05 of its potential returns per unit of risk. American Assets Trust is currently generating about 0.0 per unit of risk. If you would invest 6,380 in Growth Fund Of on December 24, 2024 and sell it today you would earn a total of 794.00 from holding Growth Fund Of or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Growth Fund Of vs. American Assets Trust
Performance |
| Timeline |
| Growth Fund |
| American Assets Trust |
Growth Fund and American Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and American Assets
The main advantage of trading using opposite Growth Fund and American Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, American Assets 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 American Assets will offset losses from the drop in American Assets' long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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