Correlation Between American Funds and City National
Can any of the company-specific risk be diversified away by investing in both American Funds and City National 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 City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and City National Rochdale, you can compare the effects of market volatilities on American Funds and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and City National.
Diversification Opportunities for American Funds and City National
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and City is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 Inflation are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of American Funds i.e., American Funds and City National go up and down completely randomly.
Pair Corralation between American Funds and City National
Assuming the 90 days horizon American Funds is expected to generate 3.64 times less return on investment than City National. In addition to that, American Funds is 2.84 times more volatile than City National Rochdale. It trades about 0.03 of its total potential returns per unit of risk. City National Rochdale is currently generating about 0.28 per unit of volatility. If you would invest 1,724 in City National Rochdale on September 19, 2024 and sell it today you would earn a total of 258.00 from holding City National Rochdale or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Inflation vs. City National Rochdale
Performance |
| Timeline |
| American Funds Inflation |
| City National Rochdale |
American Funds and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and City National
The main advantage of trading using opposite American Funds and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| American Funds vs. Jhancock Diversified Macro | American Funds vs. Massmutual Premier Diversified | American Funds vs. Pioneer Diversified High | American Funds vs. Tiaa Cref Small Cap Blend |
| City National vs. American Funds Inflation | City National vs. Altegris Futures Evolution | City National vs. Deutsche Global Inflation | City National vs. Guidepath Managed Futures |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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