Correlation Between American Funds and Knights Of
Can any of the company-specific risk be diversified away by investing in both American Funds and Knights Of 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 Knights Of 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 Knights Of Columbus, you can compare the effects of market volatilities on American Funds and Knights Of 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 Knights Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Knights Of.
Diversification Opportunities for American Funds and Knights Of
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Knights is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Knights Of Columbus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knights Of Columbus 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 Knights Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knights Of Columbus has no effect on the direction of American Funds i.e., American Funds and Knights Of go up and down completely randomly.
Pair Corralation between American Funds and Knights Of
Assuming the 90 days horizon American Funds is expected to generate 1.39 times less return on investment than Knights Of. But when comparing it to its historical volatility, American Funds The is 1.02 times less risky than Knights Of. It trades about 0.15 of its potential returns per unit of risk. Knights Of Columbus is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 869.00 in Knights Of Columbus on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Knights Of Columbus or generate 1.5% 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. Knights Of Columbus
Performance |
| Timeline |
| American Funds |
| Knights Of Columbus |
American Funds and Knights Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Knights Of
The main advantage of trading using opposite American Funds and Knights Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Knights Of 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 Knights Of will offset losses from the drop in Knights Of'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 |
| Knights Of vs. Franklin High Income | Knights Of vs. California High Yield Municipal | Knights Of vs. Western Asset High | Knights Of vs. Strategic Allocation Aggressive |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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