Correlation Between Catalyst Exceed and American Mutual
Can any of the company-specific risk be diversified away by investing in both Catalyst Exceed and American Mutual 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 Catalyst Exceed and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Exceed Defined and American Mutual Fund, you can compare the effects of market volatilities on Catalyst Exceed and American Mutual 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 Catalyst Exceed with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Exceed and American Mutual.
Diversification Opportunities for Catalyst Exceed and American Mutual
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Exceed Defined and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Catalyst Exceed 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 Catalyst Exceed Defined are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Catalyst Exceed i.e., Catalyst Exceed and American Mutual go up and down completely randomly.
Pair Corralation between Catalyst Exceed and American Mutual
Assuming the 90 days horizon Catalyst Exceed is expected to generate 1.14 times less return on investment than American Mutual. In addition to that, Catalyst Exceed is 1.34 times more volatile than American Mutual Fund. It trades about 0.08 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.12 per unit of volatility. If you would invest 4,703 in American Mutual Fund on September 12, 2024 and sell it today you would earn a total of 1,220 from holding American Mutual Fund or generate 25.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Exceed Defined vs. American Mutual Fund
Performance |
| Timeline |
| Catalyst Exceed Defined |
| American Mutual |
Catalyst Exceed and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Exceed and American Mutual
The main advantage of trading using opposite Catalyst Exceed and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Exceed position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual's long position.| Catalyst Exceed vs. American Mutual Fund | Catalyst Exceed vs. Transamerica Large Cap | Catalyst Exceed vs. Cb Large Cap | Catalyst Exceed vs. Lord Abbett Affiliated |
| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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