Correlation Between American Fds and American Funds
Can any of the company-specific risk be diversified away by investing in both American Fds 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 American Fds and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Fds Smallcap and American Funds Smallcap, you can compare the effects of market volatilities on American Fds 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 American Fds with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Fds and American Funds.
Diversification Opportunities for American Fds and American Funds
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and American is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding American Fds Smallcap and American Funds Smallcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Smallcap and American Fds 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 Fds Smallcap 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 Smallcap has no effect on the direction of American Fds i.e., American Fds and American Funds go up and down completely randomly.
Pair Corralation between American Fds and American Funds
Assuming the 90 days horizon American Fds Smallcap is expected to under-perform the American Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Fds Smallcap is 1.0 times less risky than American Funds. The mutual fund trades about -0.13 of its potential returns per unit of risk. The American Funds Smallcap is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 6,889 in American Funds Smallcap on November 27, 2024 and sell it today you would lose (151.00) from holding American Funds Smallcap or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Fds Smallcap vs. American Funds Smallcap
Performance |
| Timeline |
| American Fds Smallcap |
| American Funds Smallcap |
American Fds and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Fds and American Funds
The main advantage of trading using opposite American Fds and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Fds 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.| American Fds vs. Putnam Global Health | American Fds vs. Schwab Health Care | American Fds vs. Deutsche Health And | American Fds vs. Tekla Healthcare Investors |
| American Funds vs. Pimco Energy Tactical | American Funds vs. Franklin Natural Resources | American Funds vs. Thrivent Natural Resources | American Funds vs. Alpsalerian Energy Infrastructure |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |