Correlation Between American Funds and Mirova Global
Can any of the company-specific risk be diversified away by investing in both American Funds and Mirova Global 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 Mirova Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Mirova Global Sustainable, you can compare the effects of market volatilities on American Funds and Mirova Global 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 Mirova Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mirova Global.
Diversification Opportunities for American Funds and Mirova Global
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Mirova is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Mirova Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirova Global Sustainable 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 New are associated (or correlated) with Mirova Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirova Global Sustainable has no effect on the direction of American Funds i.e., American Funds and Mirova Global go up and down completely randomly.
Pair Corralation between American Funds and Mirova Global
Assuming the 90 days horizon American Funds New is expected to generate 1.15 times more return on investment than Mirova Global. However, American Funds is 1.15 times more volatile than Mirova Global Sustainable. It trades about 0.1 of its potential returns per unit of risk. Mirova Global Sustainable is currently generating about 0.09 per unit of risk. If you would invest 5,130 in American Funds New on September 12, 2024 and sell it today you would earn a total of 1,621 from holding American Funds New or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds New vs. Mirova Global Sustainable
Performance |
| Timeline |
| American Funds New |
| Mirova Global Sustainable |
American Funds and Mirova Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mirova Global
The main advantage of trading using opposite American Funds and Mirova Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mirova Global 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 Mirova Global will offset losses from the drop in Mirova Global's long position.| American Funds vs. American Funds New | American Funds vs. New Perspective Fund | American Funds vs. New Perspective Fund | American Funds vs. New Perspective Fund |
| Mirova Global vs. American Funds New | Mirova Global vs. American Funds New | Mirova Global vs. New Perspective Fund | Mirova Global vs. New Perspective Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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