Correlation Between American Funds and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both American Funds and Growth Strategy 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 Strategy 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 Strategy Fund, you can compare the effects of market volatilities on American Funds and Growth Strategy 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 Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Growth Strategy.
Diversification Opportunities for American Funds and Growth Strategy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Growth is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of American Funds i.e., American Funds and Growth Strategy go up and down completely randomly.
Pair Corralation between American Funds and Growth Strategy
Assuming the 90 days horizon American Funds is expected to generate 1.26 times less return on investment than Growth Strategy. But when comparing it to its historical volatility, American Funds The is 1.33 times less risky than Growth Strategy. It trades about 0.08 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,021 in Growth Strategy Fund on August 25, 2024 and sell it today you would earn a total of 276.00 from holding Growth Strategy Fund or generate 27.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Growth Strategy Fund
Performance |
| Timeline |
| American Funds |
| Growth Strategy |
American Funds and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Growth Strategy
The main advantage of trading using opposite American Funds and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Growth Strategy 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 Strategy will offset losses from the drop in Growth Strategy's long position.| American Funds vs. Alliancebernstein Global High | American Funds vs. Metropolitan West High | American Funds vs. Goldman Sachs High | American Funds vs. Western Asset High |
| Growth Strategy vs. Gabelli Convertible And | Growth Strategy vs. Allianzgi Vertible Fund | Growth Strategy vs. Absolute Convertible Arbitrage | Growth Strategy vs. Lord Abbett Vertible |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |