Correlation Between American Mutual and Bear Profund
Can any of the company-specific risk be diversified away by investing in both American Mutual and Bear Profund 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 Bear Profund 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 Bear Profund Bear, you can compare the effects of market volatilities on American Mutual and Bear Profund 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 Bear Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Bear Profund.
Diversification Opportunities for American Mutual and Bear Profund
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Bear is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Bear Profund Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Profund Bear 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 Bear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Profund Bear has no effect on the direction of American Mutual i.e., American Mutual and Bear Profund go up and down completely randomly.
Pair Corralation between American Mutual and Bear Profund
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.7 times more return on investment than Bear Profund. However, American Mutual Fund is 1.42 times less risky than Bear Profund. It trades about 0.16 of its potential returns per unit of risk. Bear Profund Bear is currently generating about -0.1 per unit of risk. If you would invest 4,839 in American Mutual Fund on September 3, 2024 and sell it today you would earn a total of 1,185 from holding American Mutual Fund or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Bear Profund Bear
Performance |
| Timeline |
| American Mutual |
| Bear Profund Bear |
American Mutual and Bear Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Bear Profund
The main advantage of trading using opposite American Mutual and Bear Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Bear Profund 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 Bear Profund will offset losses from the drop in Bear Profund's long position.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Bear Profund vs. Artisan High Income | Bear Profund vs. Federated Pennsylvania Municipal | Bear Profund vs. Transamerica Funds | Bear Profund vs. Ambrus Core Bond |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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