Correlation Between Growth Strategy and American Funds
Can any of the company-specific risk be diversified away by investing in both Growth Strategy 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 Growth Strategy and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and American Funds The, you can compare the effects of market volatilities on Growth Strategy 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 Growth Strategy with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and American Funds.
Diversification Opportunities for Growth Strategy and American Funds
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GROWTH and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and American Funds The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds and Growth Strategy 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 Growth Strategy Fund 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 has no effect on the direction of Growth Strategy i.e., Growth Strategy and American Funds go up and down completely randomly.
Pair Corralation between Growth Strategy and American Funds
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 1.33 times more return on investment than American Funds. However, Growth Strategy is 1.33 times more volatile than American Funds The. It trades about 0.07 of its potential returns per unit of risk. American Funds The is currently generating about 0.08 per unit of risk. If you would invest 957.00 in Growth Strategy Fund on September 4, 2024 and sell it today you would earn a total of 251.00 from holding Growth Strategy Fund or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Growth Strategy Fund vs. American Funds The
Performance |
| Timeline |
| Growth Strategy |
| American Funds |
Growth Strategy and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and American Funds
The main advantage of trading using opposite Growth Strategy and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy 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.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| American Funds vs. Lord Abbett Government | American Funds vs. Ab Government Exchange | American Funds vs. Short Term Government Fund | American Funds vs. Dunham Porategovernment Bond |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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