Correlation Between American Funds and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Funds and Growth 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 Growth 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 Growth Fund Growth, you can compare the effects of market volatilities on American Funds and Growth 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Growth Fund.
Diversification Opportunities for American Funds and Growth Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Growth Fund Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund Growth has no effect on the direction of American Funds i.e., American Funds and Growth Fund go up and down completely randomly.
Pair Corralation between American Funds and Growth Fund
Assuming the 90 days horizon American Funds The is expected to generate 1.08 times more return on investment than Growth Fund. However, American Funds is 1.08 times more volatile than Growth Fund Growth. It trades about 0.11 of its potential returns per unit of risk. Growth Fund Growth is currently generating about 0.1 per unit of risk. If you would invest 6,019 in American Funds The on September 4, 2024 and sell it today you would earn a total of 2,224 from holding American Funds The or generate 36.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
American Funds The vs. Growth Fund Growth
Performance |
| Timeline |
| American Funds |
| Growth Fund Growth |
American Funds and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Growth Fund
The main advantage of trading using opposite American Funds and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Growth Fund vs. Income Stock Fund | Growth Fund vs. Emerging Markets Fund | Growth Fund vs. International Fund International | Growth Fund vs. Small Cap Stock |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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