Correlation Between American Funds and Amana Growth
Can any of the company-specific risk be diversified away by investing in both American Funds and Amana Growth 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 Amana Growth 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 Amana Growth Fund, you can compare the effects of market volatilities on American Funds and Amana Growth 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 Amana Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Amana Growth.
Diversification Opportunities for American Funds and Amana Growth
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Amana is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Amana Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Growth 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 Amana Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Growth has no effect on the direction of American Funds i.e., American Funds and Amana Growth go up and down completely randomly.
Pair Corralation between American Funds and Amana Growth
Assuming the 90 days horizon American Funds is expected to generate 1.06 times less return on investment than Amana Growth. But when comparing it to its historical volatility, American Funds The is 1.04 times less risky than Amana Growth. It trades about 0.12 of its potential returns per unit of risk. Amana Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,497 in Amana Growth Fund on September 13, 2024 and sell it today you would earn a total of 144.00 from holding Amana Growth Fund or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Amana Growth Fund
Performance |
| Timeline |
| American Funds |
| Amana Growth |
American Funds and Amana Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Amana Growth
The main advantage of trading using opposite American Funds and Amana Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Amana Growth 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 Amana Growth will offset losses from the drop in Amana Growth's long position.| American Funds vs. Mid Cap Growth | American Funds vs. Needham Aggressive Growth | American Funds vs. Qs Defensive Growth | American Funds vs. L Abbett Growth |
| Amana Growth vs. Amana Income Fund | Amana Growth vs. Amana Income Fund | Amana Growth vs. Amana Developing World | Amana Growth vs. Amana Growth Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |