Correlation Between American Mutual and Siit Small
Can any of the company-specific risk be diversified away by investing in both American Mutual and Siit Small 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 Siit Small 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 Siit Small Mid, you can compare the effects of market volatilities on American Mutual and Siit Small 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 Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Siit Small.
Diversification Opportunities for American Mutual and Siit Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Siit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Siit Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Mid 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 Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Mid has no effect on the direction of American Mutual i.e., American Mutual and Siit Small go up and down completely randomly.
Pair Corralation between American Mutual and Siit Small
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.61 times more return on investment than Siit Small. However, American Mutual Fund is 1.64 times less risky than Siit Small. It trades about -0.07 of its potential returns per unit of risk. Siit Small Mid is currently generating about -0.18 per unit of risk. If you would invest 5,973 in American Mutual Fund on November 27, 2024 and sell it today you would lose (221.00) from holding American Mutual Fund or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Siit Small Mid
Performance |
| Timeline |
| American Mutual |
| Siit Small Mid |
American Mutual and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Siit Small
The main advantage of trading using opposite American Mutual and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Siit Small 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 Siit Small will offset losses from the drop in Siit Small'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 |
| Siit Small vs. T Rowe Price | Siit Small vs. T Rowe Price | Siit Small vs. Channing Intrinsic Value | Siit Small vs. Allianzgi Small Cap Blend |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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