Correlation Between Omni Small-cap and American Funds
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap 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 Omni Small-cap and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and American Funds Capital, you can compare the effects of market volatilities on Omni Small-cap 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 Omni Small-cap with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and American Funds.
Diversification Opportunities for Omni Small-cap and American Funds
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omni and American is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and American Funds Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Capital and Omni Small-cap 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 Omni Small Cap Value 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 Capital has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and American Funds go up and down completely randomly.
Pair Corralation between Omni Small-cap and American Funds
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 2.96 times more return on investment than American Funds. However, Omni Small-cap is 2.96 times more volatile than American Funds Capital. It trades about 0.2 of its potential returns per unit of risk. American Funds Capital is currently generating about -0.07 per unit of risk. If you would invest 1,968 in Omni Small Cap Value on August 25, 2024 and sell it today you would earn a total of 166.00 from holding Omni Small Cap Value or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. American Funds Capital
Performance |
| Timeline |
| Omni Small Cap |
| American Funds Capital |
Omni Small-cap and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and American Funds
The main advantage of trading using opposite Omni Small-cap and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap 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.| Omni Small-cap vs. Pace Municipal Fixed | Omni Small-cap vs. Transamerica Intermediate Muni | Omni Small-cap vs. Dws Government Money | Omni Small-cap vs. Nuveen All American Municipal |
| American Funds vs. Qs Growth Fund | American Funds vs. Blackrock Sm Cap | American Funds vs. Omni Small Cap Value | American Funds vs. Ab E Opportunities |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |