American Funds Correlations

Mutual Funds . USA . 
Fund . American Funds 2020
FAOTX Fund  USD 14.25  0.01  0.07%   
The current 90-days correlation between American Funds 2020 and American Funds 2025 is 0.07 (i.e., Significant diversification). The correlation of American Funds is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

American Funds Correlation With Market

Poor diversification

The correlation between American Funds 2020 and DJI is 0.73 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2020 and DJI in the same portfolio, assuming nothing else is changed.
  
Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in American Funds 2020. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in estimate.

Moving together with American Mutual Fund

  0.79AMECX Income FundPairCorr
  0.64AMFCX American MutualPairCorr
  0.63AMFFX American MutualPairCorr
  0.98RNCCX American Funds IncomePairCorr
  0.87FPTPX American Funds ConsePairCorr
  0.61AMPFX Amcap Fund ClassPairCorr
  0.82RNPBX New PerspectivePairCorr
  0.82RNPAX New PerspectivePairCorr
  0.8RNPHX New PerspectivePairCorr
  0.8RNPGX New PerspectivePairCorr
  0.81RNPCX New PerspectivePairCorr
  0.8RNPFX New PerspectivePairCorr
  0.72AMRMX American MutualPairCorr
  0.72AMRFX American MutualPairCorr
  0.89RNRPX American Funds RetirementPairCorr
  0.68RNWEX New World FundPairCorr
  0.68RNWHX New World FundPairCorr
  0.69RNWGX New World FundPairCorr
  0.68RNWAX New World FundPairCorr
  0.68RNWCX New World FundPairCorr

Related Correlations Analysis

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Risk-Adjusted Indicators

There is a big difference between American Mutual Fund performing well and American Funds Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze American Funds' multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

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