Correlation Between American Funds and Simt Large
Can any of the company-specific risk be diversified away by investing in both American Funds and Simt Large 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 Large 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 Large Cap, you can compare the effects of market volatilities on American Funds and Simt Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Simt Large.
Diversification Opportunities for American Funds and Simt Large
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Simt is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of American Funds i.e., American Funds and Simt Large go up and down completely randomly.
Pair Corralation between American Funds and Simt Large
Assuming the 90 days horizon American Funds is expected to generate 1.21 times less return on investment than Simt Large. But when comparing it to its historical volatility, American Funds American is 1.38 times less risky than Simt Large. It trades about 0.33 of its potential returns per unit of risk. Simt Large Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,741 in Simt Large Cap on September 4, 2024 and sell it today you would earn a total of 141.00 from holding Simt Large Cap or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Funds American vs. Simt Large Cap
Performance |
| Timeline |
| American Funds American |
| Simt Large Cap |
American Funds and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Simt Large
The main advantage of trading using opposite American Funds and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Simt Large 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 Large will offset losses from the drop in Simt Large's long position.| American Funds vs. Qs Growth Fund | American Funds vs. Semiconductor Ultrasector Profund | American Funds vs. Growth Strategy Fund | American Funds vs. T Rowe Price |
| Simt Large vs. Simt Multi Asset Accumulation | Simt Large vs. Saat Market Growth | Simt Large vs. Simt Real Return | Simt Large vs. Simt Small Cap |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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