Correlation Between American Funds and Meeder Funds
Can any of the company-specific risk be diversified away by investing in both American Funds and Meeder Funds 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 Meeder Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Smallcap and Meeder Funds , you can compare the effects of market volatilities on American Funds and Meeder Funds 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 Meeder Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Meeder Funds.
Diversification Opportunities for American Funds and Meeder Funds
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Meeder is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Smallcap and Meeder Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meeder Funds 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 Smallcap are associated (or correlated) with Meeder Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meeder Funds has no effect on the direction of American Funds i.e., American Funds and Meeder Funds go up and down completely randomly.
Pair Corralation between American Funds and Meeder Funds
Assuming the 90 days horizon American Funds Smallcap is expected to generate 6.45 times more return on investment than Meeder Funds. However, American Funds is 6.45 times more volatile than Meeder Funds . It trades about 0.06 of its potential returns per unit of risk. Meeder Funds is currently generating about 0.14 per unit of risk. If you would invest 6,123 in American Funds Smallcap on September 3, 2024 and sell it today you would earn a total of 1,091 from holding American Funds Smallcap or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Smallcap vs. Meeder Funds
Performance |
| Timeline |
| American Funds Smallcap |
| Meeder Funds |
American Funds and Meeder Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Meeder Funds
The main advantage of trading using opposite American Funds and Meeder Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Meeder Funds 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 Meeder Funds will offset losses from the drop in Meeder Funds' long position.| American Funds vs. T Rowe Price | American Funds vs. Northern Small Cap | American Funds vs. Jhancock Diversified Macro | American Funds vs. Delaware Limited Term Diversified |
| Meeder Funds vs. Simt Real Estate | Meeder Funds vs. Columbia Real Estate | Meeder Funds vs. Goldman Sachs Real | Meeder Funds vs. Fidelity Real Estate |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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