Correlation Between Amcap Fund and Volumetric Fund

Can any of the company-specific risk be diversified away by investing in both Amcap Fund and Volumetric 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 Amcap Fund and Volumetric Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amcap Fund Class and Volumetric Fund Volumetric, you can compare the effects of market volatilities on Amcap Fund and Volumetric 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 Amcap Fund with a short position of Volumetric Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and Volumetric Fund.

Diversification Opportunities for Amcap Fund and Volumetric Fund

0.98

Correlation Coefficient

Amcap Fund  Volumetric Fund

Almost no diversification

The 3 months correlation between Amcap and Volumetric is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and Volumetric Fund Volumetric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volumetric Fund Volu and Amcap 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 Amcap Fund Class are associated (or correlated) with Volumetric Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volumetric Fund Volu has no effect on the direction of Amcap Fund i.e., Amcap Fund and Volumetric Fund go up and down completely randomly.

Pair Corralation between Amcap Fund and Volumetric Fund

Assuming the 90 days horizon Amcap Fund Class is expected to generate 1.22 times more return on investment than Volumetric Fund. However, Amcap Fund is 1.22 times more volatile than Volumetric Fund Volumetric. It trades about 0.22 of its potential returns per unit of risk. Volumetric Fund Volumetric is currently generating about 0.13 per unit of risk. If you would invest  3,118  in Amcap Fund Class on May 4, 2025 and sell it today you would earn a total of  365.00  from holding Amcap Fund Class or generate 11.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Amcap Fund Class  vs.  Volumetric Fund Volumetric

Amcap Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amcap Fund Class are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Amcap Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Volumetric Fund Volu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Volumetric Fund Volumetric are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Volumetric Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amcap Fund and Volumetric Fund

The main advantage of trading using opposite Amcap Fund and Volumetric Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund position performs unexpectedly, Volumetric 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 Volumetric Fund will offset losses from the drop in Volumetric Fund's long position.

The idea behind Amcap Fund Class and Volumetric Fund Volumetric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.