Correlation Between American Funds and SIA Engineering
Can any of the company-specific risk be diversified away by investing in both American Funds and SIA Engineering 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 SIA Engineering 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 SIA Engineering, you can compare the effects of market volatilities on American Funds and SIA Engineering 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 SIA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and SIA Engineering.
Diversification Opportunities for American Funds and SIA Engineering
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and SIA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and SIA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIA Engineering 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 SIA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIA Engineering has no effect on the direction of American Funds i.e., American Funds and SIA Engineering go up and down completely randomly.
Pair Corralation between American Funds and SIA Engineering
Assuming the 90 days horizon American Funds Fundamental is expected to generate 5.67 times more return on investment than SIA Engineering. However, American Funds is 5.67 times more volatile than SIA Engineering. It trades about 0.04 of its potential returns per unit of risk. SIA Engineering is currently generating about 0.09 per unit of risk. If you would invest 7,811 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 607.00 from holding American Funds Fundamental or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.88% |
| Values | Daily Returns |
American Funds Fundamental vs. SIA Engineering
Performance |
| Timeline |
| American Funds Funda |
| SIA Engineering |
American Funds and SIA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and SIA Engineering
The main advantage of trading using opposite American Funds and SIA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, SIA Engineering 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 SIA Engineering will offset losses from the drop in SIA Engineering's 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 |
| SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. AerSale 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |