Correlation Between American Funds and Mh Elite
Can any of the company-specific risk be diversified away by investing in both American Funds and Mh Elite 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 Mh Elite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Growth and Mh Elite Fund, you can compare the effects of market volatilities on American Funds and Mh Elite 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 Mh Elite. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mh Elite.
Diversification Opportunities for American Funds and Mh Elite
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and MHEFX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Growth and Mh Elite Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Fund 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 Growth are associated (or correlated) with Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Fund has no effect on the direction of American Funds i.e., American Funds and Mh Elite go up and down completely randomly.
Pair Corralation between American Funds and Mh Elite
Assuming the 90 days horizon American Funds Growth is expected to generate 1.03 times more return on investment than Mh Elite. However, American Funds is 1.03 times more volatile than Mh Elite Fund. It trades about 0.11 of its potential returns per unit of risk. Mh Elite Fund is currently generating about 0.08 per unit of risk. If you would invest 1,769 in American Funds Growth on August 31, 2024 and sell it today you would earn a total of 959.00 from holding American Funds Growth or generate 54.21% 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 Growth vs. Mh Elite Fund
Performance |
| Timeline |
| American Funds Growth |
| Mh Elite Fund |
American Funds and Mh Elite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mh Elite
The main advantage of trading using opposite American Funds and Mh Elite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mh Elite 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 Mh Elite will offset losses from the drop in Mh Elite's long position.| American Funds vs. American Funds Growth | American Funds vs. American Funds Growth | American Funds vs. Franklin Mutual Shares | American Funds vs. Franklin Mutual Shares |
| Mh Elite vs. Alliancebernstein National Municipal | Mh Elite vs. Ab Impact Municipal | Mh Elite vs. Federated Ohio Municipal | Mh Elite vs. Blrc Sgy Mnp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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