Correlation Between Europac Gold and American Funds
Can any of the company-specific risk be diversified away by investing in both Europac Gold 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 Europac Gold and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and American Funds Preservation, you can compare the effects of market volatilities on Europac Gold 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 Europac Gold with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and American Funds.
Diversification Opportunities for Europac Gold and American Funds
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Europac and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and American Funds Preservation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Prese and Europac Gold 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 Europac Gold 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 Prese has no effect on the direction of Europac Gold i.e., Europac Gold and American Funds go up and down completely randomly.
Pair Corralation between Europac Gold and American Funds
Assuming the 90 days horizon Europac Gold Fund is expected to under-perform the American Funds. In addition to that, Europac Gold is 16.48 times more volatile than American Funds Preservation. It trades about -0.2 of its total potential returns per unit of risk. American Funds Preservation is currently generating about -0.07 per unit of volatility. If you would invest 943.00 in American Funds Preservation on August 29, 2024 and sell it today you would lose (2.00) from holding American Funds Preservation or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Europac Gold Fund vs. American Funds Preservation
Performance |
| Timeline |
| Europac Gold |
| American Funds Prese |
Europac Gold and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and American Funds
The main advantage of trading using opposite Europac Gold and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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.| Europac Gold vs. First Eagle Gold | Europac Gold vs. First Eagle Gold | Europac Gold vs. Oppenheimer Gold Special | Europac Gold vs. Aquagold International |
| American Funds vs. Precious Metals And | American Funds vs. Invesco Gold Special | American Funds vs. Europac Gold Fund | American Funds vs. Vy Goldman Sachs |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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