Correlation Between Us Government and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Us Government and Growth 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 Us Government and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Growth Fund Of, you can compare the effects of market volatilities on Us Government and Growth 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 Us Government with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Growth Fund.
Diversification Opportunities for Us Government and Growth Fund
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMUSX and Growth is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Us Government 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 Us Government Securities are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Us Government i.e., Us Government and Growth Fund go up and down completely randomly.
Pair Corralation between Us Government and Growth Fund
Assuming the 90 days horizon Us Government is expected to generate 5.11 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Us Government Securities is 3.12 times less risky than Growth Fund. It trades about 0.07 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,494 in Growth Fund Of on September 3, 2024 and sell it today you would earn a total of 912.00 from holding Growth Fund Of or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Growth Fund Of
Performance |
| Timeline |
| Us Government Securities |
| Growth Fund |
Us Government and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Growth Fund
The main advantage of trading using opposite Us Government and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Us Government vs. Artisan Emerging Markets | Us Government vs. Templeton Developing Markets | Us Government vs. Massmutual Select Diversified | Us Government vs. Morgan Stanley Emerging |
| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. Smallcap World Fund | Growth Fund vs. American Balanced Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |