Correlation Between American Funds and Iman Fund
Can any of the company-specific risk be diversified away by investing in both American Funds and Iman 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 Iman 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 Iman Fund Class, you can compare the effects of market volatilities on American Funds and Iman 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 Iman Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Iman Fund.
Diversification Opportunities for American Funds and Iman Fund
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Iman is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Iman Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iman Fund Class 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 Iman Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iman Fund Class has no effect on the direction of American Funds i.e., American Funds and Iman Fund go up and down completely randomly.
Pair Corralation between American Funds and Iman Fund
Assuming the 90 days horizon American Funds The is expected to generate 1.21 times more return on investment than Iman Fund. However, American Funds is 1.21 times more volatile than Iman Fund Class. It trades about 0.11 of its potential returns per unit of risk. Iman Fund Class is currently generating about 0.1 per unit of risk. If you would invest 5,595 in American Funds The on September 12, 2024 and sell it today you would earn a total of 2,757 from holding American Funds The or generate 49.28% 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. Iman Fund Class
Performance |
| Timeline |
| American Funds |
| Iman Fund Class |
American Funds and Iman Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Iman Fund
The main advantage of trading using opposite American Funds and Iman Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Iman 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 Iman Fund will offset losses from the drop in Iman Fund's long position.| American Funds vs. Growth Fund Investor | American Funds vs. Select Fund Investor | American Funds vs. International Growth Fund | American Funds vs. Heritage Fund Investor |
| Iman Fund vs. American Funds The | Iman Fund vs. American Funds The | Iman Fund vs. Growth Fund Of | Iman Fund vs. Growth Fund Of |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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