Correlation Between American Funds and Simt Us
Can any of the company-specific risk be diversified away by investing in both American Funds and Simt Us 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 Simt Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Simt Managed Volatility, you can compare the effects of market volatilities on American Funds and Simt Us 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 Simt Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Simt Us.
Diversification Opportunities for American Funds and Simt Us
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Simt is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility 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 American are associated (or correlated) with Simt Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of American Funds i.e., American Funds and Simt Us go up and down completely randomly.
Pair Corralation between American Funds and Simt Us
Assuming the 90 days horizon American Funds American is expected to generate 0.95 times more return on investment than Simt Us. However, American Funds American is 1.05 times less risky than Simt Us. It trades about 0.08 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.06 per unit of risk. If you would invest 5,738 in American Funds American on November 27, 2024 and sell it today you would earn a total of 41.00 from holding American Funds American or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Simt Managed Volatility
Performance |
| Timeline |
| American Funds American |
| Simt Managed Volatility |
American Funds and Simt Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Simt Us
The main advantage of trading using opposite American Funds and Simt Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Simt Us 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 Simt Us will offset losses from the drop in Simt Us' long position.| American Funds vs. Tiaa Cref Large Cap Growth | American Funds vs. Wasatch Large Cap | American Funds vs. Tax Managed Large Cap | American Funds vs. Ab Large Cap |
| Simt Us vs. Simt Managed Volatility | Simt Us vs. Simt Managed Volatility | Simt Us vs. Hartford Schroders Smallmid | Simt Us vs. Fam Value 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |