Correlation Between American Mutual and Qs Growth
Can any of the company-specific risk be diversified away by investing in both American Mutual and Qs 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 Qs 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 Qs Growth Fund, you can compare the effects of market volatilities on American Mutual and Qs 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 Qs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Qs Growth.
Diversification Opportunities for American Mutual and Qs Growth
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and SCHAX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Qs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs 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 Qs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Growth Fund has no effect on the direction of American Mutual i.e., American Mutual and Qs Growth go up and down completely randomly.
Pair Corralation between American Mutual and Qs Growth
Assuming the 90 days horizon American Mutual is expected to generate 1.04 times less return on investment than Qs Growth. But when comparing it to its historical volatility, American Mutual Fund is 1.15 times less risky than Qs Growth. It trades about 0.09 of its potential returns per unit of risk. Qs Growth Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Qs Growth Fund on September 2, 2024 and sell it today you would earn a total of 426.00 from holding Qs Growth Fund or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Qs Growth Fund
Performance |
| Timeline |
| American Mutual |
| Qs Growth Fund |
American Mutual and Qs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Qs Growth
The main advantage of trading using opposite American Mutual and Qs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Qs 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 Qs Growth will offset losses from the drop in Qs Growth'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 |
| Qs Growth vs. Franklin Mutual Beacon | Qs Growth vs. Templeton Developing Markets | Qs Growth vs. Franklin Mutual Global | Qs Growth vs. Franklin Mutual Global |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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