Correlation Between American Mutual and Lsv Us
Can any of the company-specific risk be diversified away by investing in both American Mutual and Lsv Us 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 Lsv Us 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 Lsv Managed Volatility, you can compare the effects of market volatilities on American Mutual and Lsv Us 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 Lsv Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Lsv Us.
Diversification Opportunities for American Mutual and Lsv Us
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Lsv is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Lsv Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Managed Volatility 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 Lsv Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Managed Volatility has no effect on the direction of American Mutual i.e., American Mutual and Lsv Us go up and down completely randomly.
Pair Corralation between American Mutual and Lsv Us
Assuming the 90 days horizon American Mutual is expected to generate 1.39 times less return on investment than Lsv Us. But when comparing it to its historical volatility, American Mutual Fund is 1.14 times less risky than Lsv Us. It trades about 0.28 of its potential returns per unit of risk. Lsv Managed Volatility is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,206 in Lsv Managed Volatility on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Lsv Managed Volatility or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Lsv Managed Volatility
Performance |
| Timeline |
| American Mutual |
| Lsv Managed Volatility |
American Mutual and Lsv Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Lsv Us
The main advantage of trading using opposite American Mutual and Lsv Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Lsv Us 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 Lsv Us will offset losses from the drop in Lsv Us' long position.| American Mutual vs. Federated Institutional High | American Mutual vs. Multi Manager High Yield | American Mutual vs. Mesirow Financial High | American Mutual vs. Pioneer High Yield |
| Lsv Us vs. Edgar Lomax Value | Lsv Us vs. Aqr Large Cap | Lsv Us vs. Cohen Steers Mlp | Lsv Us vs. Amg River Road |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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