Correlation Between Amcap Fund and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Amcap Fund and Bond Fund 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 Bond Fund 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 Bond Fund Of, you can compare the effects of market volatilities on Amcap Fund and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and Bond Fund.
Diversification Opportunities for Amcap Fund and Bond Fund
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amcap and BOND is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and Bond Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Amcap Fund i.e., Amcap Fund and Bond Fund go up and down completely randomly.
Pair Corralation between Amcap Fund and Bond Fund
Assuming the 90 days horizon Amcap Fund Class is expected to generate 2.44 times more return on investment than Bond Fund. However, Amcap Fund is 2.44 times more volatile than Bond Fund Of. It trades about 0.29 of its potential returns per unit of risk. Bond Fund Of is currently generating about 0.08 per unit of risk. If you would invest 4,322 in Amcap Fund Class on September 1, 2024 and sell it today you would earn a total of 227.00 from holding Amcap Fund Class or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amcap Fund Class vs. Bond Fund Of
Performance |
| Timeline |
| Amcap Fund Class |
| Bond Fund |
Amcap Fund and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and Bond Fund
The main advantage of trading using opposite Amcap Fund and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Amcap Fund vs. Europacific Growth Fund | Amcap Fund vs. Capital World Growth | Amcap Fund vs. Washington Mutual Investors | Amcap Fund vs. American Mutual Fund |
| Bond Fund vs. Qs Large Cap | Bond Fund vs. Legg Mason Bw | Bond Fund vs. Americafirst Large Cap | Bond Fund vs. Dodge Cox Stock |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |