Correlation Between American Funds and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both American Funds and Aristotle 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 American Funds and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Aristotle Funds Series, you can compare the effects of market volatilities on American Funds and Aristotle 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 American Funds with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Aristotle Funds.
Diversification Opportunities for American Funds and Aristotle Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Aristotle is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and American Funds 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 American Funds The are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of American Funds i.e., American Funds and Aristotle Funds go up and down completely randomly.
Pair Corralation between American Funds and Aristotle Funds
Assuming the 90 days horizon American Funds The is expected to generate 1.2 times more return on investment than Aristotle Funds. However, American Funds is 1.2 times more volatile than Aristotle Funds Series. It trades about 0.1 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.1 per unit of risk. If you would invest 4,805 in American Funds The on September 4, 2024 and sell it today you would earn a total of 3,445 from holding American Funds The or generate 71.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds The vs. Aristotle Funds Series
Performance |
| Timeline |
| American Funds |
| Aristotle Funds Series |
American Funds and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Aristotle Funds
The main advantage of trading using opposite American Funds and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Aristotle 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| American Funds vs. Vanguard Financials Index | American Funds vs. Blackrock Financial Institutions | American Funds vs. Fidelity Advisor Financial | American Funds vs. Gabelli Global Financial |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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