Correlation Between Income Growth and AMERICAN
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By analyzing existing cross correlation between Income Growth Fund and AMERICAN HONDA FINANCE, you can compare the effects of market volatilities on Income Growth and AMERICAN 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 Income Growth with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and AMERICAN.
Diversification Opportunities for Income Growth and AMERICAN
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Income and AMERICAN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and AMERICAN HONDA FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HONDA FINANCE and Income Growth 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 Income Growth Fund are associated (or correlated) with AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HONDA FINANCE has no effect on the direction of Income Growth i.e., Income Growth and AMERICAN go up and down completely randomly.
Pair Corralation between Income Growth and AMERICAN
Assuming the 90 days horizon Income Growth Fund is expected to generate 1.8 times more return on investment than AMERICAN. However, Income Growth is 1.8 times more volatile than AMERICAN HONDA FINANCE. It trades about 0.08 of its potential returns per unit of risk. AMERICAN HONDA FINANCE is currently generating about 0.03 per unit of risk. If you would invest 2,832 in Income Growth Fund on December 1, 2024 and sell it today you would earn a total of 913.00 from holding Income Growth Fund or generate 32.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Income Growth Fund vs. AMERICAN HONDA FINANCE
Performance |
| Timeline |
| Income Growth |
| AMERICAN HONDA FINANCE |
Income Growth and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Growth and AMERICAN
The main advantage of trading using opposite Income Growth and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Income Growth vs. Ultra Fund I | Income Growth vs. Value Fund I | Income Growth vs. Equity Growth Fund | Income Growth vs. International Growth Fund |
| AMERICAN vs. High Performance Beverages | AMERICAN vs. PepsiCo | AMERICAN vs. SNDL Inc | AMERICAN vs. Fomento Economico Mexicano |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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