Correlation Between Mutual Of and American Funds
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and American Funds Income, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and American Funds.
Diversification Opportunities for Mutual Of and American Funds
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mutual and American is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and American Funds Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Income and Mutual Of 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 Mutual Of America 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 Income has no effect on the direction of Mutual Of i.e., Mutual Of and American Funds go up and down completely randomly.
Pair Corralation between Mutual Of and American Funds
Assuming the 90 days horizon Mutual Of America is expected to generate 3.1 times more return on investment than American Funds. However, Mutual Of is 3.1 times more volatile than American Funds Income. It trades about 0.06 of its potential returns per unit of risk. American Funds Income is currently generating about 0.14 per unit of risk. If you would invest 1,290 in Mutual Of America on September 12, 2024 and sell it today you would earn a total of 326.00 from holding Mutual Of America or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. American Funds Income
Performance |
| Timeline |
| Mutual Of America |
| American Funds Income |
Mutual Of and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and American Funds
The main advantage of trading using opposite Mutual Of and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Blackrock Inflation Protected | Mutual Of vs. American Funds Inflation | Mutual Of vs. Atac Inflation Rotation | Mutual Of vs. Ab Bond Inflation |
| American Funds vs. Guidemark Smallmid Cap | American Funds vs. Pace Smallmedium Value | American Funds vs. Kinetics Small Cap | American Funds vs. Mutual Of America |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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