Correlation Between American Funds and Borgestad
Can any of the company-specific risk be diversified away by investing in both American Funds and Borgestad 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 Borgestad 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 Borgestad A, you can compare the effects of market volatilities on American Funds and Borgestad 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 Borgestad. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Borgestad.
Diversification Opportunities for American Funds and Borgestad
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Borgestad is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Borgestad A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borgestad A 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 Borgestad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borgestad A has no effect on the direction of American Funds i.e., American Funds and Borgestad go up and down completely randomly.
Pair Corralation between American Funds and Borgestad
Assuming the 90 days horizon American Funds is expected to generate 3.28 times less return on investment than Borgestad. But when comparing it to its historical volatility, American Funds Fundamental is 2.71 times less risky than Borgestad. It trades about 0.06 of its potential returns per unit of risk. Borgestad A is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Borgestad A on November 3, 2024 and sell it today you would earn a total of 572.00 from holding Borgestad A or generate 47.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Borgestad A
Performance |
| Timeline |
| American Funds Funda |
| Borgestad A |
American Funds and Borgestad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Borgestad
The main advantage of trading using opposite American Funds and Borgestad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Borgestad 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 Borgestad will offset losses from the drop in Borgestad'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 |
| Borgestad vs. Goodtech | Borgestad vs. Havila Shipping ASA | Borgestad vs. Eidesvik Offshore ASA | Borgestad vs. Byggma |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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