Correlation Between American Mutual and Deutsche Short-term
Can any of the company-specific risk be diversified away by investing in both American Mutual and Deutsche Short-term 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 Deutsche Short-term 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 Deutsche Short Term Municipal, you can compare the effects of market volatilities on American Mutual and Deutsche Short-term 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 Deutsche Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Deutsche Short-term.
Diversification Opportunities for American Mutual and Deutsche Short-term
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Deutsche is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Deutsche Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Short Term 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 Deutsche Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Short Term has no effect on the direction of American Mutual i.e., American Mutual and Deutsche Short-term go up and down completely randomly.
Pair Corralation between American Mutual and Deutsche Short-term
Assuming the 90 days horizon American Mutual Fund is expected to generate 6.78 times more return on investment than Deutsche Short-term. However, American Mutual is 6.78 times more volatile than Deutsche Short Term Municipal. It trades about 0.24 of its potential returns per unit of risk. Deutsche Short Term Municipal is currently generating about 0.15 per unit of risk. If you would invest 5,821 in American Mutual Fund on September 1, 2024 and sell it today you would earn a total of 182.00 from holding American Mutual Fund or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Mutual Fund vs. Deutsche Short Term Municipal
Performance |
| Timeline |
| American Mutual |
| Deutsche Short Term |
American Mutual and Deutsche Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Deutsche Short-term
The main advantage of trading using opposite American Mutual and Deutsche Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Deutsche Short-term 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 Deutsche Short-term will offset losses from the drop in Deutsche Short-term'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 |
| Deutsche Short-term vs. American Mutual Fund | Deutsche Short-term vs. John Hancock Investment | Deutsche Short-term vs. Tax Managed Large Cap | Deutsche Short-term vs. Qs Large Cap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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