Correlation Between New Perspective and At Mid
Can any of the company-specific risk be diversified away by investing in both New Perspective and At Mid 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 New Perspective and At Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and At Mid Cap, you can compare the effects of market volatilities on New Perspective and At Mid 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 New Perspective with a short position of At Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and At Mid.
Diversification Opportunities for New Perspective and At Mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and AWMIX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and At Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on At Mid Cap and New Perspective 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 New Perspective Fund are associated (or correlated) with At Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of At Mid Cap has no effect on the direction of New Perspective i.e., New Perspective and At Mid go up and down completely randomly.
Pair Corralation between New Perspective and At Mid
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.86 times more return on investment than At Mid. However, New Perspective Fund is 1.16 times less risky than At Mid. It trades about 0.06 of its potential returns per unit of risk. At Mid Cap is currently generating about 0.03 per unit of risk. If you would invest 5,101 in New Perspective Fund on October 23, 2024 and sell it today you would earn a total of 1,238 from holding New Perspective Fund or generate 24.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. At Mid Cap
Performance |
| Timeline |
| New Perspective |
| At Mid Cap |
New Perspective and At Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and At Mid
The main advantage of trading using opposite New Perspective and At Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, At Mid 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 At Mid will offset losses from the drop in At Mid's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| At Mid vs. Multi Manager High Yield | At Mid vs. Simt High Yield | At Mid vs. Fidelity Capital Income | At Mid vs. Neuberger Berman Income |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |