Correlation Between General Money and Mutual Of
Can any of the company-specific risk be diversified away by investing in both General Money and Mutual Of 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 General Money and Mutual Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Mutual Of America, you can compare the effects of market volatilities on General Money and Mutual Of 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 General Money with a short position of Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Mutual Of.
Diversification Opportunities for General Money and Mutual Of
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between General and Mutual is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America and General Money 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 General Money Market are associated (or correlated) with Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of General Money i.e., General Money and Mutual Of go up and down completely randomly.
Pair Corralation between General Money and Mutual Of
Assuming the 90 days horizon General Money is expected to generate 1.86 times less return on investment than Mutual Of. But when comparing it to its historical volatility, General Money Market is 1.45 times less risky than Mutual Of. It trades about 0.02 of its potential returns per unit of risk. Mutual Of America is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,247 in Mutual Of America on September 22, 2024 and sell it today you would earn a total of 198.00 from holding Mutual Of America or generate 15.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.22% |
| Values | Daily Returns |
General Money Market vs. Mutual Of America
Performance |
| Timeline |
| General Money Market |
| Mutual Of America |
General Money and Mutual Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Mutual Of
The main advantage of trading using opposite General Money and Mutual Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Mutual Of 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 Mutual Of will offset losses from the drop in Mutual Of's long position.| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
| Mutual Of vs. Cref Money Market | Mutual Of vs. General Money Market | Mutual Of vs. Dws Government Money | Mutual Of vs. Prudential Government Money |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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