Correlation Between Ab International and American Funds
Can any of the company-specific risk be diversified away by investing in both Ab International 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 Ab International and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab International Growth and American Funds Growth, you can compare the effects of market volatilities on Ab International 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 Ab International with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab International and American Funds.
Diversification Opportunities for Ab International and American Funds
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AWPIX and American is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ab International Growth and American Funds Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Growth and Ab International 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 Ab International Growth 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 Growth has no effect on the direction of Ab International i.e., Ab International and American Funds go up and down completely randomly.
Pair Corralation between Ab International and American Funds
Assuming the 90 days horizon Ab International Growth is expected to generate 0.78 times more return on investment than American Funds. However, Ab International Growth is 1.29 times less risky than American Funds. It trades about -0.03 of its potential returns per unit of risk. American Funds Growth is currently generating about -0.19 per unit of risk. If you would invest 1,987 in Ab International Growth on December 30, 2024 and sell it today you would lose (17.00) from holding Ab International Growth or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab International Growth vs. American Funds Growth
Performance |
| Timeline |
| Ab International Growth |
| American Funds Growth |
Ab International and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab International and American Funds
The main advantage of trading using opposite Ab International and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab International 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.| Ab International vs. Cref Money Market | ||
| Ab International vs. Money Market Obligations | ||
| Ab International vs. Rbc Money Market | ||
| Ab International vs. Financials Ultrasector Profund |
| American Funds vs. Inverse Mid Cap Strategy | ||
| American Funds vs. Applied Finance Explorer | ||
| American Funds vs. Cornercap Small Cap Value | ||
| American Funds vs. Fidelity Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |