Correlation Between American Funds and International Growth
Can any of the company-specific risk be diversified away by investing in both American Funds and International Growth 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 Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and International Growth And, you can compare the effects of market volatilities on American Funds and International Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and International Growth.
Diversification Opportunities for American Funds and International Growth
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and International is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and International Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth And 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 Fundamental are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth And has no effect on the direction of American Funds i.e., American Funds and International Growth go up and down completely randomly.
Pair Corralation between American Funds and International Growth
Assuming the 90 days horizon American Funds Fundamental is expected to under-perform the International Growth. In addition to that, American Funds is 1.25 times more volatile than International Growth And. It trades about -0.15 of its total potential returns per unit of risk. International Growth And is currently generating about 0.14 per unit of volatility. If you would invest 3,746 in International Growth And on December 1, 2024 and sell it today you would earn a total of 75.00 from holding International Growth And or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Funds Fundamental vs. International Growth And
Performance |
| Timeline |
| American Funds Funda |
| International Growth And |
American Funds and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and International Growth
The main advantage of trading using opposite American Funds and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, International Growth 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 Growth will offset losses from the drop in International Growth's long position.| American Funds vs. Rbb Fund Trust | American Funds vs. Aqr Global Macro | American Funds vs. T Rowe Price | American Funds vs. Doubleline Global Bond |
| International Growth vs. Msift High Yield | International Growth vs. Aqr Risk Parity | International Growth vs. Alpine High Yield | International Growth vs. Prudential High Yield |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |