Correlation Between Mutual Of and Small-cap Growth
Can any of the company-specific risk be diversified away by investing in both Mutual Of and Small-cap 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 Mutual Of and Small-cap Growth 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 Small Cap Growth Profund, you can compare the effects of market volatilities on Mutual Of and Small-cap 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 Mutual Of with a short position of Small-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Small-cap Growth.
Diversification Opportunities for Mutual Of and Small-cap Growth
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mutual and Small-cap is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Small Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth 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 Small-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Mutual Of i.e., Mutual Of and Small-cap Growth go up and down completely randomly.
Pair Corralation between Mutual Of and Small-cap Growth
Assuming the 90 days horizon Mutual Of America is expected to under-perform the Small-cap Growth. In addition to that, Mutual Of is 1.1 times more volatile than Small Cap Growth Profund. It trades about -0.01 of its total potential returns per unit of risk. Small Cap Growth Profund is currently generating about 0.01 per unit of volatility. If you would invest 11,298 in Small Cap Growth Profund on October 22, 2024 and sell it today you would earn a total of 14.00 from holding Small Cap Growth Profund or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Small Cap Growth Profund
Performance |
| Timeline |
| Mutual Of America |
| Small Cap Growth |
Mutual Of and Small-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Small-cap Growth
The main advantage of trading using opposite Mutual Of and Small-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of position performs unexpectedly, Small-cap 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 Small-cap Growth will offset losses from the drop in Small-cap Growth's long position.| Mutual Of vs. Bbh Intermediate Municipal | Mutual Of vs. Nuveen Strategic Municipal | Mutual Of vs. Virtus Seix Government | Mutual Of vs. Morningstar Municipal Bond |
| Small-cap Growth vs. Small Cap Value Profund | Small-cap Growth vs. Mid Cap Growth Profund | Small-cap Growth vs. Mid Cap Value Profund | Small-cap Growth vs. Small Cap Profund Small Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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