Correlation Between American Funds and Aston Montag
Can any of the company-specific risk be diversified away by investing in both American Funds and Aston Montag 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 Aston Montag 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 Aston Montag Caldwell, you can compare the effects of market volatilities on American Funds and Aston Montag 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 Aston Montag. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Aston Montag.
Diversification Opportunities for American Funds and Aston Montag
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Aston is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell 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 Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of American Funds i.e., American Funds and Aston Montag go up and down completely randomly.
Pair Corralation between American Funds and Aston Montag
Assuming the 90 days horizon American Funds The is expected to generate 1.12 times more return on investment than Aston Montag. However, American Funds is 1.12 times more volatile than Aston Montag Caldwell. It trades about 0.12 of its potential returns per unit of risk. Aston Montag Caldwell is currently generating about 0.1 per unit of risk. If you would invest 4,568 in American Funds The on September 12, 2024 and sell it today you would earn a total of 3,790 from holding American Funds The or generate 82.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Aston Montag Caldwell
Performance |
| Timeline |
| American Funds |
| Aston Montag Caldwell |
American Funds and Aston Montag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Aston Montag
The main advantage of trading using opposite American Funds and Aston Montag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Aston Montag 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 Aston Montag will offset losses from the drop in Aston Montag's long position.| American Funds vs. Growth Fund Investor | American Funds vs. Select Fund Investor | American Funds vs. International Growth Fund | American Funds vs. Heritage Fund Investor |
| Aston Montag vs. American Funds The | Aston Montag vs. American Funds The | Aston Montag vs. Growth Fund Of | Aston Montag vs. Growth Fund Of |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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