Correlation Between American Funds and BAWAG Group
Can any of the company-specific risk be diversified away by investing in both American Funds and BAWAG Group 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 BAWAG Group 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 BAWAG Group AG, you can compare the effects of market volatilities on American Funds and BAWAG Group 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 BAWAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and BAWAG Group.
Diversification Opportunities for American Funds and BAWAG Group
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and BAWAG is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and BAWAG Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAWAG Group AG 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 BAWAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAWAG Group AG has no effect on the direction of American Funds i.e., American Funds and BAWAG Group go up and down completely randomly.
Pair Corralation between American Funds and BAWAG Group
Assuming the 90 days horizon American Funds Fundamental is expected to under-perform the BAWAG Group. In addition to that, American Funds is 1.39 times more volatile than BAWAG Group AG. It trades about -0.07 of its total potential returns per unit of risk. BAWAG Group AG is currently generating about 0.32 per unit of volatility. If you would invest 7,475 in BAWAG Group AG on November 4, 2024 and sell it today you would earn a total of 1,280 from holding BAWAG Group AG or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
American Funds Fundamental vs. BAWAG Group AG
Performance |
| Timeline |
| American Funds Funda |
| BAWAG Group AG |
American Funds and BAWAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and BAWAG Group
The main advantage of trading using opposite American Funds and BAWAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, BAWAG Group 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 BAWAG Group will offset losses from the drop in BAWAG Group's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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