Correlation Between American Funds and Huber Capital
Can any of the company-specific risk be diversified away by investing in both American Funds and Huber Capital 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 Huber Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2030 and Huber Capital Diversified, you can compare the effects of market volatilities on American Funds and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Huber Capital.
Diversification Opportunities for American Funds and Huber Capital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Huber is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2030 and Huber Capital Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Diversified 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 2030 are associated (or correlated) with Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Diversified has no effect on the direction of American Funds i.e., American Funds and Huber Capital go up and down completely randomly.
Pair Corralation between American Funds and Huber Capital
Assuming the 90 days horizon American Funds is expected to generate 1.38 times less return on investment than Huber Capital. But when comparing it to its historical volatility, American Funds 2030 is 1.63 times less risky than Huber Capital. It trades about 0.1 of its potential returns per unit of risk. Huber Capital Diversified is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,773 in Huber Capital Diversified on September 12, 2024 and sell it today you would earn a total of 734.00 from holding Huber Capital Diversified or generate 41.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2030 vs. Huber Capital Diversified
Performance |
| Timeline |
| American Funds 2030 |
| Huber Capital Diversified |
American Funds and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Huber Capital
The main advantage of trading using opposite American Funds and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| American Funds vs. Huber Capital Diversified | American Funds vs. Wasatch Small Cap | American Funds vs. Davenport Small Cap | American Funds vs. Fidelity Advisor Diversified |
| Huber Capital vs. Pro Blend Moderate Term | Huber Capital vs. Jp Morgan Smartretirement | Huber Capital vs. Putnman Retirement Ready | Huber Capital vs. Strategic Allocation Moderate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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