Correlation Between Growth Fund and American Funds
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Fund 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 Fund Of and American Funds Amcap, you can compare the effects of market volatilities on Growth Fund 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 Fund with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and American Funds.
Diversification Opportunities for Growth Fund and American Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Growth and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and American Funds Amcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Amcap and Growth Fund 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 Fund Of 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 Amcap has no effect on the direction of Growth Fund i.e., Growth Fund and American Funds go up and down completely randomly.
Pair Corralation between Growth Fund and American Funds
If you would invest 7,447 in Growth Fund Of on August 30, 2024 and sell it today you would earn a total of 645.00 from holding Growth Fund Of or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Growth Fund Of vs. American Funds Amcap
Performance |
| Timeline |
| Growth Fund |
| American Funds Amcap |
Growth Fund and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and American Funds
The main advantage of trading using opposite Growth Fund and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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 Fund vs. Kinetics Small Cap | Growth Fund vs. Small Pany Growth | Growth Fund vs. Tfa Alphagen Growth | Growth Fund vs. T Rowe Price |
| American Funds vs. Alliancebernstein Global High | American Funds vs. Strategic Allocation Aggressive | American Funds vs. Pace High Yield | American Funds vs. Needham Aggressive Growth |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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