Correlation Between American Funds and Country Group
Can any of the company-specific risk be diversified away by investing in both American Funds and Country 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 Country 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 Country Group Holdings, you can compare the effects of market volatilities on American Funds and Country 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 Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Country Group.
Diversification Opportunities for American Funds and Country Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Country is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of American Funds i.e., American Funds and Country Group go up and down completely randomly.
Pair Corralation between American Funds and Country Group
Assuming the 90 days horizon American Funds Fundamental is expected to generate 0.94 times more return on investment than Country Group. However, American Funds Fundamental is 1.06 times less risky than Country Group. It trades about -0.07 of its potential returns per unit of risk. Country Group Holdings is currently generating about -0.18 per unit of risk. If you would invest 8,920 in American Funds Fundamental on November 4, 2024 and sell it today you would lose (502.00) from holding American Funds Fundamental or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Country Group Holdings
Performance |
| Timeline |
| American Funds Funda |
| Country Group Holdings |
American Funds and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Country Group
The main advantage of trading using opposite American Funds and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Country 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 Country Group will offset losses from the drop in Country 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 |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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