Correlation Between Amcap Fund and American High-income
Can any of the company-specific risk be diversified away by investing in both Amcap Fund and American High-income 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 Amcap Fund and American High-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcap Fund Class and American High Income Municipal, you can compare the effects of market volatilities on Amcap Fund and American High-income 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 Amcap Fund with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and American High-income.
Diversification Opportunities for Amcap Fund and American High-income
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amcap and American is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Amcap Fund 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 Amcap Fund Class are associated (or correlated) with American High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Amcap Fund i.e., Amcap Fund and American High-income go up and down completely randomly.
Pair Corralation between Amcap Fund and American High-income
Assuming the 90 days horizon Amcap Fund Class is expected to under-perform the American High-income. In addition to that, Amcap Fund is 4.44 times more volatile than American High Income Municipal. It trades about -0.05 of its total potential returns per unit of risk. American High Income Municipal is currently generating about -0.02 per unit of volatility. If you would invest 1,537 in American High Income Municipal on December 25, 2024 and sell it today you would lose (10.00) from holding American High Income Municipal or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcap Fund Class vs. American High Income Municipal
Performance |
| Timeline |
| Amcap Fund Class |
| American High Income |
Amcap Fund and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and American High-income
The main advantage of trading using opposite Amcap Fund and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund position performs unexpectedly, American High-income 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 High-income will offset losses from the drop in American High-income's long position.| Amcap Fund vs. Transamerica Large Cap | Amcap Fund vs. Calvert Large Cap | Amcap Fund vs. Touchstone Large Cap | Amcap Fund vs. Jhancock Disciplined Value |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |