Correlation Between First American and Growth Fund
Can any of the company-specific risk be diversified away by investing in both First American and Growth Fund 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 First American and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Growth Fund Of, you can compare the effects of market volatilities on First American and Growth Fund 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 First American with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Growth Fund.
Diversification Opportunities for First American and Growth Fund
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Growth is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and First American 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 First American Funds are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of First American i.e., First American and Growth Fund go up and down completely randomly.
Pair Corralation between First American and Growth Fund
If you would invest 8,061 in Growth Fund Of on September 13, 2024 and sell it today you would earn a total of 240.00 from holding Growth Fund Of or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. Growth Fund Of
Performance |
| Timeline |
| First American Funds |
| Growth Fund |
First American and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Growth Fund
The main advantage of trading using opposite First American and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| First American vs. Money Market Obligations | First American vs. Franklin Government Money | First American vs. Ubs Money Series | First American vs. General Money Market |
| Growth Fund vs. Alternative Asset Allocation | Growth Fund vs. Touchstone Large Cap | Growth Fund vs. Rational Strategic Allocation | Growth Fund vs. Qs Large 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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