Correlation Between American Funds and Akre Focus
Can any of the company-specific risk be diversified away by investing in both American Funds and Akre Focus 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 Akre Focus 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 Akre Focus Fund, you can compare the effects of market volatilities on American Funds and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Akre Focus.
Diversification Opportunities for American Funds and Akre Focus
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Akre is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of American Funds i.e., American Funds and Akre Focus go up and down completely randomly.
Pair Corralation between American Funds and Akre Focus
Assuming the 90 days horizon American Funds is expected to generate 1.32 times less return on investment than Akre Focus. In addition to that, American Funds is 1.27 times more volatile than Akre Focus Fund. It trades about 0.33 of its total potential returns per unit of risk. Akre Focus Fund is currently generating about 0.54 per unit of volatility. If you would invest 6,999 in Akre Focus Fund on September 1, 2024 and sell it today you would earn a total of 585.00 from holding Akre Focus Fund or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Funds The vs. Akre Focus Fund
Performance |
| Timeline |
| American Funds |
| Akre Focus Fund |
American Funds and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Akre Focus
The main advantage of trading using opposite American Funds and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| American Funds vs. Prudential Real Estate | American Funds vs. Fidelity Real Estate | American Funds vs. Pender Real Estate | American Funds vs. Great West Real Estate |
| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Vanguard Dividend Growth |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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