Correlation Between American Mutual and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Mutual and Growth 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 American Mutual and Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on American Mutual and Growth 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 American Mutual with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Growth Fund.
Diversification Opportunities for American Mutual and Growth Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Growth is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of American Mutual i.e., American Mutual and Growth Fund go up and down completely randomly.
Pair Corralation between American Mutual and Growth Fund
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.56 times more return on investment than Growth Fund. However, American Mutual Fund is 1.79 times less risky than Growth Fund. It trades about 0.34 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.12 per unit of risk. If you would invest 5,441 in American Mutual Fund on November 5, 2024 and sell it today you would earn a total of 198.00 from holding American Mutual Fund or generate 3.64% 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. Growth Fund Of
Performance |
| Timeline |
| American Mutual |
| Growth Fund |
American Mutual and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Growth Fund
The main advantage of trading using opposite American Mutual and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| American Mutual vs. Chestnut Street Exchange | American Mutual vs. Edward Jones Money | American Mutual vs. Aig Government Money | American Mutual vs. Vanguard Money Market |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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