Correlation Between Fa 529 and American Funds
Can any of the company-specific risk be diversified away by investing in both Fa 529 and American Funds 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 Fa 529 and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and American Funds Inflation, you can compare the effects of market volatilities on Fa 529 and American Funds 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 Fa 529 with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and American Funds.
Diversification Opportunities for Fa 529 and American Funds
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FFCGX and American is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Inflation and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Fa 529 i.e., Fa 529 and American Funds go up and down completely randomly.
Pair Corralation between Fa 529 and American Funds
Assuming the 90 days horizon Fa 529 Aggressive is expected to under-perform the American Funds. In addition to that, Fa 529 is 2.39 times more volatile than American Funds Inflation. It trades about -0.04 of its total potential returns per unit of risk. American Funds Inflation is currently generating about 0.15 per unit of volatility. If you would invest 937.00 in American Funds Inflation on September 12, 2024 and sell it today you would earn a total of 6.00 from holding American Funds Inflation or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. American Funds Inflation
Performance |
| Timeline |
| Fa 529 Aggressive |
| American Funds Inflation |
Fa 529 and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and American Funds
The main advantage of trading using opposite Fa 529 and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Fa 529 vs. Artisan High Income | Fa 529 vs. Pace High Yield | Fa 529 vs. Multisector Bond Sma | Fa 529 vs. California Bond Fund |
| American Funds vs. Franklin High Income | American Funds vs. Ab Global Risk | American Funds vs. Alliancebernstein Global High | American Funds vs. Fa 529 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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