Correlation Between Aggressive Growth and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth and Amcap Fund 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 Aggressive Growth and Amcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Fund and Amcap Fund Class, you can compare the effects of market volatilities on Aggressive Growth and Amcap Fund 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 Aggressive Growth with a short position of Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Amcap Fund.
Diversification Opportunities for Aggressive Growth and Amcap Fund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aggressive and Amcap is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Fund and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class and Aggressive Growth 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 Aggressive Growth Fund are associated (or correlated) with Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Amcap Fund go up and down completely randomly.
Pair Corralation between Aggressive Growth and Amcap Fund
Assuming the 90 days horizon Aggressive Growth Fund is expected to generate 1.25 times more return on investment than Amcap Fund. However, Aggressive Growth is 1.25 times more volatile than Amcap Fund Class. It trades about 0.09 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.08 per unit of risk. If you would invest 4,748 in Aggressive Growth Fund on January 24, 2024 and sell it today you would earn a total of 972.00 from holding Aggressive Growth Fund or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Fund vs. Amcap Fund Class
Performance |
| Timeline |
| Aggressive Growth |
| Amcap Fund Class |
Aggressive Growth and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Amcap Fund
The main advantage of trading using opposite Aggressive Growth and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Aggressive Growth vs. Income Stock Fund | Aggressive Growth vs. Emerging Markets Fund | Aggressive Growth vs. International Fund International | Aggressive Growth vs. Small Cap Stock |
| Amcap Fund vs. Income Fund Of | Amcap Fund vs. New World Fund | Amcap Fund vs. American Mutual Fund | Amcap Fund vs. American Mutual Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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