Correlation Between Equity Growth and American Funds
Can any of the company-specific risk be diversified away by investing in both Equity Growth 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 Equity Growth and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Strategy and American Funds The, you can compare the effects of market volatilities on Equity Growth 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 Equity Growth with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and American Funds.
Diversification Opportunities for Equity Growth and American Funds
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equity and American is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Strategy and American Funds The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds and Equity Growth 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 Equity Growth Strategy 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 Equity Growth i.e., Equity Growth and American Funds go up and down completely randomly.
Pair Corralation between Equity Growth and American Funds
Assuming the 90 days horizon Equity Growth Strategy is expected to generate 1.44 times more return on investment than American Funds. However, Equity Growth is 1.44 times more volatile than American Funds The. It trades about 0.14 of its potential returns per unit of risk. American Funds The is currently generating about 0.12 per unit of risk. If you would invest 1,474 in Equity Growth Strategy on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Equity Growth Strategy or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Growth Strategy vs. American Funds The
Performance |
| Timeline |
| Equity Growth Strategy |
| American Funds |
Equity Growth and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and American Funds
The main advantage of trading using opposite Equity Growth and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth 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.| Equity Growth vs. Jhancock Global Equity | Equity Growth vs. Barings Global Floating | Equity Growth vs. Scharf Global Opportunity | Equity Growth vs. Legg Mason Global |
| American Funds vs. Volumetric Fund Volumetric | American Funds vs. Acm Dynamic Opportunity | American Funds vs. Aam Select Income | American Funds vs. Arrow Managed Futures |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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