Correlation Between American Funds and Triumph
Can any of the company-specific risk be diversified away by investing in both American Funds and Triumph 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 Triumph 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 Triumph Group, you can compare the effects of market volatilities on American Funds and Triumph 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 Triumph. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Triumph.
Diversification Opportunities for American Funds and Triumph
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Triumph is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group 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 Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of American Funds i.e., American Funds and Triumph go up and down completely randomly.
Pair Corralation between American Funds and Triumph
Assuming the 90 days horizon American Funds Fundamental is expected to generate 1.22 times more return on investment than Triumph. However, American Funds is 1.22 times more volatile than Triumph Group. It trades about 0.2 of its potential returns per unit of risk. Triumph Group is currently generating about 0.17 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Triumph Group
Performance |
| Timeline |
| American Funds Funda |
| Triumph Group |
American Funds and Triumph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Triumph
The main advantage of trading using opposite American Funds and Triumph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Triumph 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 Triumph will offset losses from the drop in Triumph'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 |
| Triumph vs. Mercury Systems | Triumph vs. Curtiss Wright | Triumph vs. Hexcel | Triumph vs. Ducommun Incorporated |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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