Correlation Between Ambrus Core and American Balanced
Can any of the company-specific risk be diversified away by investing in both Ambrus Core and American Balanced 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 Ambrus Core and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambrus Core Bond and American Balanced Fund, you can compare the effects of market volatilities on Ambrus Core and American Balanced 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 Ambrus Core with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and American Balanced.
Diversification Opportunities for Ambrus Core and American Balanced
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ambrus and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Ambrus Core i.e., Ambrus Core and American Balanced go up and down completely randomly.
Pair Corralation between Ambrus Core and American Balanced
Assuming the 90 days horizon Ambrus Core is expected to generate 2.2 times less return on investment than American Balanced. But when comparing it to its historical volatility, Ambrus Core Bond is 2.5 times less risky than American Balanced. It trades about 0.03 of its potential returns per unit of risk. American Balanced Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,638 in American Balanced Fund on September 13, 2024 and sell it today you would earn a total of 15.00 from holding American Balanced Fund or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambrus Core Bond vs. American Balanced Fund
Performance |
| Timeline |
| Ambrus Core Bond |
| American Balanced |
Ambrus Core and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambrus Core and American Balanced
The main advantage of trading using opposite Ambrus Core and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambrus Core position performs unexpectedly, American Balanced 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 Balanced will offset losses from the drop in American Balanced's long position.| Ambrus Core vs. Loomis Sayles Inflation | Ambrus Core vs. Simt Multi Asset Inflation | Ambrus Core vs. Ab Bond Inflation | Ambrus Core vs. Schwab Treasury Inflation |
| American Balanced vs. Franklin High Yield | American Balanced vs. Morningstar Defensive Bond | American Balanced vs. Pace High Yield | American Balanced vs. Ambrus Core Bond |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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