Correlation Between Cutler Equity and American Funds
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and American Funds 2060, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and American Funds.
Diversification Opportunities for Cutler Equity and American Funds
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cutler and American is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and American Funds 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2060 and Cutler Equity 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 Cutler Equity 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 2060 has no effect on the direction of Cutler Equity i.e., Cutler Equity and American Funds go up and down completely randomly.
Pair Corralation between Cutler Equity and American Funds
Assuming the 90 days horizon Cutler Equity is expected to generate 1.08 times more return on investment than American Funds. However, Cutler Equity is 1.08 times more volatile than American Funds 2060. It trades about 0.3 of its potential returns per unit of risk. American Funds 2060 is currently generating about 0.09 per unit of risk. If you would invest 2,805 in Cutler Equity on August 31, 2024 and sell it today you would earn a total of 134.00 from holding Cutler Equity or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. American Funds 2060
Performance |
| Timeline |
| Cutler Equity |
| American Funds 2060 |
Cutler Equity and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and American Funds
The main advantage of trading using opposite Cutler Equity and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Blrc Sgy Mnp | Cutler Equity vs. Ambrus Core Bond | Cutler Equity vs. Federated Ohio Municipal | Cutler Equity vs. Legg Mason Partners |
| American Funds vs. Cutler Equity | American Funds vs. Multimedia Portfolio Multimedia | American Funds vs. Jpmorgan Equity Income | American Funds vs. Artisan Select Equity |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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