Correlation Between American Funds and Worldline
Can any of the company-specific risk be diversified away by investing in both American Funds and Worldline 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 Worldline 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 Worldline SA, you can compare the effects of market volatilities on American Funds and Worldline 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 Worldline. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Worldline.
Diversification Opportunities for American Funds and Worldline
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Worldline is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Worldline SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldline SA 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 Worldline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldline SA has no effect on the direction of American Funds i.e., American Funds and Worldline go up and down completely randomly.
Pair Corralation between American Funds and Worldline
Assuming the 90 days horizon American Funds Fundamental is expected to generate 0.3 times more return on investment than Worldline. However, American Funds Fundamental is 3.29 times less risky than Worldline. It trades about 0.04 of its potential returns per unit of risk. Worldline SA is currently generating about -0.02 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 | 96.86% |
| Values | Daily Returns |
American Funds Fundamental vs. Worldline SA
Performance |
| Timeline |
| American Funds Funda |
| Worldline SA |
American Funds and Worldline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Worldline
The main advantage of trading using opposite American Funds and Worldline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Worldline 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 Worldline will offset losses from the drop in Worldline'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 |
| Worldline vs. Atos SE | Worldline vs. Teleperformance SE | Worldline vs. Dassault Systemes SE | Worldline vs. Capgemini SE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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