Correlation Between American Funds and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both American Funds and Cloud Technologies 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 Cloud Technologies 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 Cloud Technologies SA, you can compare the effects of market volatilities on American Funds and Cloud Technologies 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 Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Cloud Technologies.
Diversification Opportunities for American Funds and Cloud Technologies
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Cloud is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies 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 Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of American Funds i.e., American Funds and Cloud Technologies go up and down completely randomly.
Pair Corralation between American Funds and Cloud Technologies
Assuming the 90 days horizon American Funds Fundamental is expected to generate 0.32 times more return on investment than Cloud Technologies. However, American Funds Fundamental is 3.17 times less risky than Cloud Technologies. It trades about 0.2 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about 0.06 per unit of risk. If you would invest 8,194 in American Funds Fundamental on October 24, 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 | Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
American Funds Fundamental vs. Cloud Technologies SA
Performance |
| Timeline |
| American Funds Funda |
| Cloud Technologies |
American Funds and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Cloud Technologies
The main advantage of trading using opposite American Funds and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| American Funds vs. Virtus High Yield | American Funds vs. Ab High Income | American Funds vs. Multi Manager High Yield | American Funds vs. Ab High Income |
| Cloud Technologies vs. Ailleron SA | Cloud Technologies vs. Asseco South Eastern | Cloud Technologies vs. Vercom SA | Cloud Technologies vs. CFI Holding SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |