Correlation Between Archer Balanced and American Funds
Can any of the company-specific risk be diversified away by investing in both Archer Balanced and American Funds 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 Archer Balanced and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Balanced Fund and American Funds American, you can compare the effects of market volatilities on Archer Balanced and American Funds 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 Archer Balanced with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Balanced and American Funds.
Diversification Opportunities for Archer Balanced and American Funds
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ARCHER and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Archer Balanced Fund and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American and Archer Balanced 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 Archer Balanced Fund are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of Archer Balanced i.e., Archer Balanced and American Funds go up and down completely randomly.
Pair Corralation between Archer Balanced and American Funds
Assuming the 90 days horizon Archer Balanced Fund is expected to under-perform the American Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Archer Balanced Fund is 1.23 times less risky than American Funds. The mutual fund trades about -0.04 of its potential returns per unit of risk. The American Funds American is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,623 in American Funds American on August 25, 2024 and sell it today you would earn a total of 7.00 from holding American Funds American or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Balanced Fund vs. American Funds American
Performance |
| Timeline |
| Archer Balanced |
| American Funds American |
Archer Balanced and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Balanced and American Funds
The main advantage of trading using opposite Archer Balanced and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Balanced position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Archer Balanced vs. American Funds American | Archer Balanced vs. American Funds American | Archer Balanced vs. American Balanced | Archer Balanced vs. American Balanced Fund |
| American Funds vs. American Funds American | American Funds vs. American Balanced | American Funds vs. American Balanced Fund | American Funds vs. American Balanced Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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