Correlation Between American Funds and Amana Participation
Can any of the company-specific risk be diversified away by investing in both American Funds and Amana Participation 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 Funds and Amana Participation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Amana Participation Fund, you can compare the effects of market volatilities on American Funds and Amana Participation 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 Funds with a short position of Amana Participation. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Amana Participation.
Diversification Opportunities for American Funds and Amana Participation
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Amana is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Amana Participation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Participation and American Funds 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 Funds Fundamental are associated (or correlated) with Amana Participation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Participation has no effect on the direction of American Funds i.e., American Funds and Amana Participation go up and down completely randomly.
Pair Corralation between American Funds and Amana Participation
Assuming the 90 days horizon American Funds Fundamental is expected to generate 9.59 times more return on investment than Amana Participation. However, American Funds is 9.59 times more volatile than Amana Participation Fund. It trades about 0.19 of its potential returns per unit of risk. Amana Participation Fund is currently generating about 0.06 per unit of risk. If you would invest 8,194 in American Funds Fundamental on October 23, 2024 and sell it today you would earn a total of 259.00 from holding American Funds Fundamental or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
American Funds Fundamental vs. Amana Participation Fund
Performance |
| Timeline |
| American Funds Funda |
| Amana Participation |
American Funds and Amana Participation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Amana Participation
The main advantage of trading using opposite American Funds and Amana Participation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Amana Participation 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 Amana Participation will offset losses from the drop in Amana Participation's long position.| American Funds vs. Small Pany Growth | American Funds vs. Needham Small Cap | American Funds vs. Praxis Small Cap | American Funds vs. Franklin Small Cap |
| Amana Participation vs. Amana Developing World | Amana Participation vs. Amana Growth Fund | Amana Participation vs. Amana Developing World | Amana Participation vs. Amana Income 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |