Correlation Between American Funds and Mmzkx
Can any of the company-specific risk be diversified away by investing in both American Funds and Mmzkx 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 Mmzkx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2065 and Mmzkx, you can compare the effects of market volatilities on American Funds and Mmzkx 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 Mmzkx. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mmzkx.
Diversification Opportunities for American Funds and Mmzkx
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Mmzkx is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2065 and Mmzkx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mmzkx 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 2065 are associated (or correlated) with Mmzkx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mmzkx has no effect on the direction of American Funds i.e., American Funds and Mmzkx go up and down completely randomly.
Pair Corralation between American Funds and Mmzkx
Assuming the 90 days horizon American Funds 2065 is expected to generate 0.71 times more return on investment than Mmzkx. However, American Funds 2065 is 1.41 times less risky than Mmzkx. It trades about 0.11 of its potential returns per unit of risk. Mmzkx is currently generating about 0.06 per unit of risk. If you would invest 1,250 in American Funds 2065 on September 16, 2024 and sell it today you would earn a total of 601.00 from holding American Funds 2065 or generate 48.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 25.81% |
| Values | Daily Returns |
American Funds 2065 vs. Mmzkx
Performance |
| Timeline |
| American Funds 2065 |
| Mmzkx |
American Funds and Mmzkx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mmzkx
The main advantage of trading using opposite American Funds and Mmzkx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mmzkx 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 Mmzkx will offset losses from the drop in Mmzkx's long position.| American Funds vs. Dunham Large Cap | American Funds vs. Avantis Large Cap | American Funds vs. Jhancock Disciplined Value | American Funds vs. Virtus Nfj Large Cap |
| Mmzkx vs. Massmutual Select Mid | Mmzkx vs. Massmutual Select Mid Cap | Mmzkx vs. Massmutual Select Mid Cap | Mmzkx vs. Massmutual Select Mid 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |