Correlation Between American Funds and Eagle Growth
Can any of the company-specific risk be diversified away by investing in both American Funds and Eagle Growth 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 Eagle Growth 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 Eagle Growth Income, you can compare the effects of market volatilities on American Funds and Eagle Growth 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 Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Eagle Growth.
Diversification Opportunities for American Funds and Eagle Growth
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Eagle is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth Income 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 Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of American Funds i.e., American Funds and Eagle Growth go up and down completely randomly.
Pair Corralation between American Funds and Eagle Growth
Assuming the 90 days horizon American Funds is expected to generate 1.48 times less return on investment than Eagle Growth. But when comparing it to its historical volatility, American Funds American is 1.23 times less risky than Eagle Growth. It trades about 0.15 of its potential returns per unit of risk. Eagle Growth Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,277 in Eagle Growth Income on September 2, 2024 and sell it today you would earn a total of 178.00 from holding Eagle Growth Income or generate 7.82% 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 American vs. Eagle Growth Income
Performance |
| Timeline |
| American Funds American |
| Eagle Growth Income |
American Funds and Eagle Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Eagle Growth
The main advantage of trading using opposite American Funds and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Eagle Growth 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 Eagle Growth will offset losses from the drop in Eagle Growth'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 |
| Eagle Growth vs. Chartwell Short Duration | Eagle Growth vs. Carillon Chartwell Short | Eagle Growth vs. Chartwell Short Duration | Eagle Growth vs. Carillon Chartwell Short |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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