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 Investor and American Funds The, 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
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Investor and American Funds The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 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 Investor 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 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
Assuming the 90 days horizon Growth Fund Investor is expected to generate 1.2 times more return on investment than American Funds. However, Growth Fund is 1.2 times more volatile than American Funds The. It trades about 0.16 of its potential returns per unit of risk. American Funds The is currently generating about 0.11 per unit of risk. If you would invest 6,093 in Growth Fund Investor on September 13, 2024 and sell it today you would earn a total of 167.00 from holding Growth Fund Investor or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Investor vs. American Funds The
Performance |
| Timeline |
| Growth Fund Investor |
| American Funds |
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. Select Fund Investor | Growth Fund vs. Ultra Fund Investor | Growth Fund vs. Heritage Fund Investor | Growth Fund vs. International Growth Fund |
| American Funds vs. Tekla Healthcare Opportunities | American Funds vs. Fidelity Advisor Health | American Funds vs. The Gabelli Healthcare | American Funds vs. Hartford Healthcare Hls |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |