Correlation Between American Mutual and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both American Mutual and Wells Fargo 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 Wells Fargo 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 Wells Fargo Large, you can compare the effects of market volatilities on American Mutual and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Wells Fargo.
Diversification Opportunities for American Mutual and Wells Fargo
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Wells is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Wells Fargo Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Large 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Large has no effect on the direction of American Mutual i.e., American Mutual and Wells Fargo go up and down completely randomly.
Pair Corralation between American Mutual and Wells Fargo
If you would invest 4,792 in American Mutual Fund on February 7, 2024 and sell it today you would earn a total of 437.00 from holding American Mutual Fund or generate 9.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 0.54% |
Values | Daily Returns |
American Mutual Fund vs. Wells Fargo Large
Performance |
Timeline |
American Mutual |
Wells Fargo Large |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
American Mutual and Wells Fargo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Mutual and Wells Fargo
The main advantage of trading using opposite American Mutual and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.American Mutual vs. Income Fund Of | American Mutual vs. New World Fund | American Mutual vs. American Funds Income | American Mutual vs. American Funds Preservation |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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