Correlation Between Chase Growth and American Funds
Can any of the company-specific risk be diversified away by investing in both Chase Growth 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 Chase Growth and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chase Growth Fund and American Funds Fundamental, you can compare the effects of market volatilities on Chase Growth 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 Chase Growth with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and American Funds.
Diversification Opportunities for Chase Growth and American Funds
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chase and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and American Funds Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Funda and Chase Growth 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 Chase Growth 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 Funda has no effect on the direction of Chase Growth i.e., Chase Growth and American Funds go up and down completely randomly.
Pair Corralation between Chase Growth and American Funds
Assuming the 90 days horizon Chase Growth Fund is expected to under-perform the American Funds. In addition to that, Chase Growth is 6.03 times more volatile than American Funds Fundamental. It trades about -0.21 of its total potential returns per unit of risk. American Funds Fundamental is currently generating about 0.05 per unit of volatility. If you would invest 8,857 in American Funds Fundamental on September 12, 2024 and sell it today you would earn a total of 60.00 from holding American Funds Fundamental or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chase Growth Fund vs. American Funds Fundamental
Performance |
| Timeline |
| Chase Growth |
| American Funds Funda |
Chase Growth and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chase Growth and American Funds
The main advantage of trading using opposite Chase Growth and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth 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.| Chase Growth vs. The Chesapeake Growth | Chase Growth vs. Aston Montag Caldwell | Chase Growth vs. The Jensen Portfolio | Chase Growth vs. Cambiar Opportunity Fund |
| American Funds vs. American Independence Kansas | American Funds vs. American Funds 2055 | American Funds vs. American Beacon Large | American Funds vs. American Beacon Ark |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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