Correlation Between American Funds and International Small
Can any of the company-specific risk be diversified away by investing in both American Funds and International Small 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 International Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Conservative and International Small Pany, you can compare the effects of market volatilities on American Funds and International Small 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 International Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and International Small.
Diversification Opportunities for American Funds and International Small
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and International is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Conservative and International Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Small Pany 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 Conservative are associated (or correlated) with International Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Small Pany has no effect on the direction of American Funds i.e., American Funds and International Small go up and down completely randomly.
Pair Corralation between American Funds and International Small
Assuming the 90 days horizon American Funds Conservative is expected to generate 0.37 times more return on investment than International Small. However, American Funds Conservative is 2.69 times less risky than International Small. It trades about 0.27 of its potential returns per unit of risk. International Small Pany is currently generating about 0.05 per unit of risk. If you would invest 1,349 in American Funds Conservative on September 5, 2024 and sell it today you would earn a total of 25.00 from holding American Funds Conservative or generate 1.85% 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 Conservative vs. International Small Pany
Performance |
| Timeline |
| American Funds Conse |
| International Small Pany |
American Funds and International Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and International Small
The main advantage of trading using opposite American Funds and International Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, International Small 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 International Small will offset losses from the drop in International Small's long position.| American Funds vs. Angel Oak Ultrashort | American Funds vs. Locorr Longshort Modities | American Funds vs. Touchstone Ultra Short | American Funds vs. Rbc Short Duration |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |