Correlation Between American Funds and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both American Funds and CANEX Metals 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 CANEX Metals 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 CANEX Metals, you can compare the effects of market volatilities on American Funds and CANEX Metals 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 CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and CANEX Metals.
Diversification Opportunities for American Funds and CANEX Metals
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and CANEX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals 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 CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of American Funds i.e., American Funds and CANEX Metals go up and down completely randomly.
Pair Corralation between American Funds and CANEX Metals
Assuming the 90 days horizon American Funds Fundamental is expected to generate 3.09 times more return on investment than CANEX Metals. However, American Funds is 3.09 times more volatile than CANEX Metals. It trades about 0.2 of its potential returns per unit of risk. CANEX Metals is currently generating about -0.22 per unit of risk. If you would invest 8,096 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 322.00 from holding American Funds Fundamental or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Funds Fundamental vs. CANEX Metals
Performance |
| Timeline |
| American Funds Funda |
| CANEX Metals |
American Funds and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and CANEX Metals
The main advantage of trading using opposite American Funds and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' long position.| American Funds vs. Federated Emerging Market | American Funds vs. Siit Emerging Markets | American Funds vs. Mid Cap 15x Strategy | American Funds vs. Ashmore Emerging Markets |
| CANEX Metals vs. Antioquia Gold | CANEX Metals vs. Radisson Mining Resources | CANEX Metals vs. Asante Gold | CANEX Metals vs. Baru Gold Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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