Correlation Between Huber Capital and American Funds
Can any of the company-specific risk be diversified away by investing in both Huber Capital and American 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 Huber Capital and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Diversified and American Funds Growth, you can compare the effects of market volatilities on Huber Capital and American 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 Huber Capital with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and American Funds.
Diversification Opportunities for Huber Capital and American Funds
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huber and American is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and American Funds Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Growth and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Growth has no effect on the direction of Huber Capital i.e., Huber Capital and American Funds go up and down completely randomly.
Pair Corralation between Huber Capital and American Funds
Assuming the 90 days horizon Huber Capital Diversified is expected to generate 1.54 times more return on investment than American Funds. However, Huber Capital is 1.54 times more volatile than American Funds Growth. It trades about 0.28 of its potential returns per unit of risk. American Funds Growth is currently generating about 0.31 per unit of risk. If you would invest 2,358 in Huber Capital Diversified on September 4, 2024 and sell it today you would earn a total of 155.00 from holding Huber Capital Diversified or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Huber Capital Diversified vs. American Funds Growth
Performance |
| Timeline |
| Huber Capital Diversified |
| American Funds Growth |
Huber Capital and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and American Funds
The main advantage of trading using opposite Huber Capital and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital position performs unexpectedly, American 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 American Funds will offset losses from the drop in American Funds' long position.| Huber Capital vs. Huber Capital Diversified | Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Mid |
| American Funds vs. Blackrock Conservative Prprdptfinstttnl | American Funds vs. Massmutual Premier Diversified | American Funds vs. Adams Diversified Equity | American Funds vs. Huber Capital Diversified |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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