Correlation Between American Mutual and International Growth
Can any of the company-specific risk be diversified away by investing in both American Mutual and International Growth 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 International Growth 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 International Growth And, you can compare the effects of market volatilities on American Mutual and International Growth 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 International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and International Growth.
Diversification Opportunities for American Mutual and International Growth
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and International is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and International Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth And 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 International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth And has no effect on the direction of American Mutual i.e., American Mutual and International Growth go up and down completely randomly.
Pair Corralation between American Mutual and International Growth
Assuming the 90 days horizon American Mutual Fund is expected to under-perform the International Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Mutual Fund is 1.1 times less risky than International Growth. The mutual fund trades about -0.08 of its potential returns per unit of risk. The International Growth And is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,700 in International Growth And on September 13, 2024 and sell it today you would earn a total of 65.00 from holding International Growth And or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Mutual Fund vs. International Growth And
Performance |
| Timeline |
| American Mutual |
| International Growth And |
American Mutual and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and International Growth
The main advantage of trading using opposite American Mutual and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| American Mutual vs. Blrc Sgy Mnp | American Mutual vs. T Rowe Price | American Mutual vs. Multisector Bond Sma | American Mutual vs. Artisan High Income |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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