Correlation Between American Funds and Eagle Small
Can any of the company-specific risk be diversified away by investing in both American Funds and Eagle Small 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 American Funds and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Government and Eagle Small Cap, you can compare the effects of market volatilities on American Funds and Eagle Small 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 American Funds with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Eagle Small.
Diversification Opportunities for American Funds and Eagle Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Government and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and American Funds 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 American Funds Government are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of American Funds i.e., American Funds and Eagle Small go up and down completely randomly.
Pair Corralation between American Funds and Eagle Small
Assuming the 90 days horizon American Funds Government is expected to generate 0.08 times more return on investment than Eagle Small. However, American Funds Government is 12.12 times less risky than Eagle Small. It trades about 0.12 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.0 per unit of risk. If you would invest 93.00 in American Funds Government on October 13, 2024 and sell it today you would earn a total of 7.00 from holding American Funds Government or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.61% |
| Values | Daily Returns |
American Funds Government vs. Eagle Small Cap
Performance |
| Timeline |
| American Funds Government |
| Eagle Small Cap |
American Funds and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Eagle Small
The main advantage of trading using opposite American Funds and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Eagle Small 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| American Funds vs. Fidelity Advisor Financial | American Funds vs. Transamerica Financial Life | American Funds vs. Mesirow Financial Small | American Funds vs. 1919 Financial Services |
| Eagle Small vs. Franklin Adjustable Government | Eagle Small vs. Payden Government Fund | Eagle Small vs. Ridgeworth Seix Government | Eagle Small vs. American Funds Government |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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