Correlation Between American Mutual and Boyar Value
Can any of the company-specific risk be diversified away by investing in both American Mutual and Boyar 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 Boyar 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 Boyar Value Fund, you can compare the effects of market volatilities on American Mutual and Boyar 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 Boyar Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Boyar Value.
Diversification Opportunities for American Mutual and Boyar Value
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Boyar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Boyar Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyar 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 Boyar Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyar Value Fund has no effect on the direction of American Mutual i.e., American Mutual and Boyar Value go up and down completely randomly.
Pair Corralation between American Mutual and Boyar Value
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.63 times more return on investment than Boyar Value. However, American Mutual Fund is 1.59 times less risky than Boyar Value. It trades about 0.13 of its potential returns per unit of risk. Boyar Value Fund is currently generating about 0.07 per unit of risk. If you would invest 4,862 in American Mutual Fund on August 26, 2024 and sell it today you would earn a total of 985.00 from holding American Mutual Fund or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Boyar Value Fund
Performance |
| Timeline |
| American Mutual |
| Boyar Value Fund |
American Mutual and Boyar Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Boyar Value
The main advantage of trading using opposite American Mutual and Boyar Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Boyar 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 Boyar Value will offset losses from the drop in Boyar Value's long position.| American Mutual vs. Maryland Short Term Tax Free | American Mutual vs. Jhancock Short Duration | American Mutual vs. Angel Oak Ultrashort | American Mutual vs. Rbc Short Duration |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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