Correlation Between American Mutual and Kngt Clb
Can any of the company-specific risk be diversified away by investing in both American Mutual and Kngt Clb 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 Kngt Clb 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 Kngt Clb Larg, you can compare the effects of market volatilities on American Mutual and Kngt Clb 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 Kngt Clb. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Kngt Clb.
Diversification Opportunities for American Mutual and Kngt Clb
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Kngt is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Kngt Clb Larg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kngt Clb Larg 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 Kngt Clb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kngt Clb Larg has no effect on the direction of American Mutual i.e., American Mutual and Kngt Clb go up and down completely randomly.
Pair Corralation between American Mutual and Kngt Clb
Assuming the 90 days horizon American Mutual is expected to generate 1.36 times less return on investment than Kngt Clb. But when comparing it to its historical volatility, American Mutual Fund is 1.17 times less risky than Kngt Clb. It trades about 0.12 of its potential returns per unit of risk. Kngt Clb Larg is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Kngt Clb Larg on August 31, 2024 and sell it today you would earn a total of 580.00 from holding Kngt Clb Larg or generate 41.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
American Mutual Fund vs. Kngt Clb Larg
Performance |
| Timeline |
| American Mutual |
| Kngt Clb Larg |
American Mutual and Kngt Clb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Kngt Clb
The main advantage of trading using opposite American Mutual and Kngt Clb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Kngt Clb 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 Kngt Clb will offset losses from the drop in Kngt Clb's long position.| American Mutual vs. Calvert Moderate Allocation | American Mutual vs. Franklin Lifesmart Retirement | American Mutual vs. Franklin Lifesmart Retirement | American Mutual vs. Jp Morgan Smartretirement |
| Kngt Clb vs. Ms Global Fixed | Kngt Clb vs. Morgan Stanley Global | Kngt Clb vs. Barings Global Floating | Kngt Clb vs. Wisdomtree Siegel Global |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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