Correlation Between 1919 Financial and American Funds
Can any of the company-specific risk be diversified away by investing in both 1919 Financial 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 1919 Financial and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1919 Financial Services and American Funds Income, you can compare the effects of market volatilities on 1919 Financial 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 1919 Financial with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and American Funds.
Diversification Opportunities for 1919 Financial and American Funds
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 1919 and American is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and American Funds Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Income and 1919 Financial 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 1919 Financial Services 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 Income has no effect on the direction of 1919 Financial i.e., 1919 Financial and American Funds go up and down completely randomly.
Pair Corralation between 1919 Financial and American Funds
Assuming the 90 days horizon 1919 Financial Services is expected to under-perform the American Funds. In addition to that, 1919 Financial is 8.87 times more volatile than American Funds Income. It trades about -0.22 of its total potential returns per unit of risk. American Funds Income is currently generating about 0.09 per unit of volatility. If you would invest 1,362 in American Funds Income on September 14, 2024 and sell it today you would earn a total of 6.00 from holding American Funds Income or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1919 Financial Services vs. American Funds Income
Performance |
| Timeline |
| 1919 Financial Services |
| American Funds Income |
1919 Financial and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1919 Financial and American Funds
The main advantage of trading using opposite 1919 Financial and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial 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.| 1919 Financial vs. Gabelli Global Financial | 1919 Financial vs. Mesirow Financial Small | 1919 Financial vs. Icon Financial Fund | 1919 Financial vs. Prudential Jennison Financial |
| American Funds vs. Lord Abbett Convertible | American Funds vs. Gabelli Convertible And | American Funds vs. Putnam Convertible Incm Gwth | American Funds vs. Virtus Convertible |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |