Correlation Between American Mutual and Investment
Can any of the company-specific risk be diversified away by investing in both American Mutual and Investment 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 Mutual and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Investment Of America, you can compare the effects of market volatilities on American Mutual and Investment 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 Mutual with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Investment.
Diversification Opportunities for American Mutual and Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Investment is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Investment Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Of America and American Mutual 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 Mutual Fund are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Of America has no effect on the direction of American Mutual i.e., American Mutual and Investment go up and down completely randomly.
Pair Corralation between American Mutual and Investment
Assuming the 90 days horizon American Mutual Fund is expected to under-perform the Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Mutual Fund is 1.5 times less risky than Investment. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Investment Of America is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,423 in Investment Of America on February 4, 2024 and sell it today you would lose (19.00) from holding Investment Of America or give up 0.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
American Mutual Fund vs. Investment Of America
Performance |
Timeline |
American Mutual |
Investment Of America |
American Mutual and Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Mutual and Investment
The main advantage of trading using opposite American Mutual and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.American Mutual vs. Income Fund Of | American Mutual vs. New World Fund | American Mutual vs. American Mutual Fund | American Mutual vs. American Funds Income |
Investment vs. Rbc Emerging Markets | Investment vs. Pnc Emerging Markets | Investment vs. Transamerica Emerging Markets | Investment vs. Eagle Mlp Strategy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |