Correlation Between Amana Developing and Iman Fund
Can any of the company-specific risk be diversified away by investing in both Amana Developing and Iman Fund 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 Amana Developing and Iman Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Developing World and Iman Fund Class, you can compare the effects of market volatilities on Amana Developing and Iman Fund 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 Amana Developing with a short position of Iman Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Iman Fund.
Diversification Opportunities for Amana Developing and Iman Fund
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amana and Iman is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Iman Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iman Fund Class and Amana Developing 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 Amana Developing World are associated (or correlated) with Iman Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iman Fund Class has no effect on the direction of Amana Developing i.e., Amana Developing and Iman Fund go up and down completely randomly.
Pair Corralation between Amana Developing and Iman Fund
Assuming the 90 days horizon Amana Developing World is expected to under-perform the Iman Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amana Developing World is 1.18 times less risky than Iman Fund. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Iman Fund Class is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,593 in Iman Fund Class on September 3, 2024 and sell it today you would earn a total of 66.00 from holding Iman Fund Class or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Developing World vs. Iman Fund Class
Performance |
| Timeline |
| Amana Developing World |
| Iman Fund Class |
Amana Developing and Iman Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Developing and Iman Fund
The main advantage of trading using opposite Amana Developing and Iman Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Iman Fund 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 Iman Fund will offset losses from the drop in Iman Fund's long position.| Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. Azzad Ethical Fund |
| Iman Fund vs. Azzad Ethical Fund | Iman Fund vs. Amana Income Fund | Iman Fund vs. Amana Growth Fund | Iman Fund vs. Amana Developing World |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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