Correlation Between American Funds and 361 Global
Can any of the company-specific risk be diversified away by investing in both American Funds and 361 Global 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 361 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Growth and 361 Global Longshort, you can compare the effects of market volatilities on American Funds and 361 Global 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 361 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and 361 Global.
Diversification Opportunities for American Funds and 361 Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and 361 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Growth and 361 Global Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 361 Global Longshort 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 Growth are associated (or correlated) with 361 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 361 Global Longshort has no effect on the direction of American Funds i.e., American Funds and 361 Global go up and down completely randomly.
Pair Corralation between American Funds and 361 Global
Assuming the 90 days horizon American Funds Growth is expected to generate 1.87 times more return on investment than 361 Global. However, American Funds is 1.87 times more volatile than 361 Global Longshort. It trades about 0.1 of its potential returns per unit of risk. 361 Global Longshort is currently generating about 0.03 per unit of risk. If you would invest 2,474 in American Funds Growth on September 3, 2024 and sell it today you would earn a total of 269.00 from holding American Funds Growth or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Growth vs. 361 Global Longshort
Performance |
| Timeline |
| American Funds Growth |
| 361 Global Longshort |
American Funds and 361 Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and 361 Global
The main advantage of trading using opposite American Funds and 361 Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, 361 Global 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 361 Global will offset losses from the drop in 361 Global's long position.| American Funds vs. Mirova Global Green | American Funds vs. Qs Global Equity | American Funds vs. 361 Global Longshort | American Funds vs. Scharf Global Opportunity |
| 361 Global vs. Aqr Long Short Equity | 361 Global vs. Old Westbury Short Term | 361 Global vs. Locorr Longshort Modities | 361 Global vs. Federated Short Term Income |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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