Correlation Between American Funds and Wellington Shields
Can any of the company-specific risk be diversified away by investing in both American Funds and Wellington Shields 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 Wellington Shields 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 Wellington Shields All Cap, you can compare the effects of market volatilities on American Funds and Wellington Shields 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 Wellington Shields. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Wellington Shields.
Diversification Opportunities for American Funds and Wellington Shields
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Wellington is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Wellington Shields All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wellington Shields All 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 Wellington Shields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wellington Shields All has no effect on the direction of American Funds i.e., American Funds and Wellington Shields go up and down completely randomly.
Pair Corralation between American Funds and Wellington Shields
Assuming the 90 days horizon American Funds The is expected to generate 0.71 times more return on investment than Wellington Shields. However, American Funds The is 1.41 times less risky than Wellington Shields. It trades about 0.13 of its potential returns per unit of risk. Wellington Shields All Cap is currently generating about -0.04 per unit of risk. If you would invest 7,510 in American Funds The on October 21, 2024 and sell it today you would earn a total of 173.00 from holding American Funds The or generate 2.3% 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. Wellington Shields All Cap
Performance |
| Timeline |
| American Funds |
| Wellington Shields All |
American Funds and Wellington Shields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Wellington Shields
The main advantage of trading using opposite American Funds and Wellington Shields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Wellington Shields 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 Wellington Shields will offset losses from the drop in Wellington Shields' long position.| American Funds vs. Ftfa Franklin Templeton Growth | American Funds vs. Morningstar Aggressive Growth | American Funds vs. The Hartford Growth | American Funds vs. Qs Defensive Growth |
| Wellington Shields vs. Voya Short Term | Wellington Shields vs. Thrivent High Yield | Wellington Shields vs. Aamhimco Short Duration | Wellington Shields vs. Wp Large Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets |