Correlation Between American Funds and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Funds and Growth Fund 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 Growth Fund 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 Growth Fund A, you can compare the effects of market volatilities on American Funds and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Growth Fund.
Diversification Opportunities for American Funds and Growth Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Growth is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Growth Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund A 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund A has no effect on the direction of American Funds i.e., American Funds and Growth Fund go up and down completely randomly.
Pair Corralation between American Funds and Growth Fund
Assuming the 90 days horizon American Funds The is expected to generate 0.39 times more return on investment than Growth Fund. However, American Funds The is 2.56 times less risky than Growth Fund. It trades about 0.45 of its potential returns per unit of risk. Growth Fund A is currently generating about 0.04 per unit of risk. If you would invest 8,027 in American Funds The on September 19, 2024 and sell it today you would earn a total of 474.00 from holding American Funds The or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Growth Fund A
Performance |
| Timeline |
| American Funds |
| Growth Fund A |
American Funds and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Growth Fund
The main advantage of trading using opposite American Funds and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| American Funds vs. Old Westbury Large | American Funds vs. Washington Mutual Investors | American Funds vs. Guidemark Large Cap | American Funds vs. Alternative Asset Allocation |
| Growth Fund vs. Cmg Ultra Short | Growth Fund vs. Astor Longshort Fund | Growth Fund vs. Blackrock Short Term Inflat Protected | Growth Fund vs. Lord Abbett Short |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |