Correlation Between American Mutual and Aam/bahl Gaynor
Can any of the company-specific risk be diversified away by investing in both American Mutual and Aam/bahl Gaynor 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 Aam/bahl Gaynor 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 Aambahl Gaynor Income, you can compare the effects of market volatilities on American Mutual and Aam/bahl Gaynor 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 Aam/bahl Gaynor. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Aam/bahl Gaynor.
Diversification Opportunities for American Mutual and Aam/bahl Gaynor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Aam/bahl is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Aambahl Gaynor Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aambahl Gaynor Income 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 Aam/bahl Gaynor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aambahl Gaynor Income has no effect on the direction of American Mutual i.e., American Mutual and Aam/bahl Gaynor go up and down completely randomly.
Pair Corralation between American Mutual and Aam/bahl Gaynor
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.95 times more return on investment than Aam/bahl Gaynor. However, American Mutual Fund is 1.06 times less risky than Aam/bahl Gaynor. It trades about -0.04 of its potential returns per unit of risk. Aambahl Gaynor Income is currently generating about -0.08 per unit of risk. If you would invest 5,880 in American Mutual Fund on October 31, 2024 and sell it today you would lose (151.00) from holding American Mutual Fund or give up 2.57% 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. Aambahl Gaynor Income
Performance |
| Timeline |
| American Mutual |
| Aambahl Gaynor Income |
American Mutual and Aam/bahl Gaynor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Aam/bahl Gaynor
The main advantage of trading using opposite American Mutual and Aam/bahl Gaynor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Aam/bahl Gaynor 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 Aam/bahl Gaynor will offset losses from the drop in Aam/bahl Gaynor's long position.| American Mutual vs. Vy Columbia Small | American Mutual vs. Tax Managed Mid Small | American Mutual vs. Small Pany Growth | American Mutual vs. Franklin Small Cap |
| Aam/bahl Gaynor vs. Asg Global Alternatives | Aam/bahl Gaynor vs. Rbc Global Opportunities | Aam/bahl Gaynor vs. Dws Global Macro | Aam/bahl Gaynor vs. Ms Global Fixed |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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