American Funds Correlations

Mutual Funds . USA . 
Fund . American Funds Tax Advantaged
TAIFX Fund  USD 16.49  0.02  0.12%   
The current 90-days correlation between American Funds Tax and American Balanced Fund is 0.86 (i.e., Very poor 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 Tax Advantaged and DJI is 0.69 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Tax Advantaged and DJI in the same portfolio, assuming nothing else is changed.
  
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in American Funds Tax Advantaged. 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 census.

Moving together with American Mutual Fund

  0.87AMECX Income FundPairCorr
  0.73AMFCX American MutualPairCorr
  0.73AMFFX American MutualPairCorr
  0.93RNCCX American Funds IncomePairCorr
  0.86AMEFX Income FundPairCorr
  0.62RNGFX New Economy FundPairCorr
  0.63RNGBX New Economy FundPairCorr
  0.63RNGAX New Economy FundPairCorr
  0.62RNGEX New Economy FundPairCorr
  0.62RNGCX New Economy FundPairCorr
  0.88FPTPX American Funds ConsePairCorr
  0.74CDJAX American Funds CollegePairCorr
  0.66AMPCX Amcap Fund ClassPairCorr
  0.65AMPFX Amcap Fund ClassPairCorr
  0.83RNPBX New PerspectivePairCorr
  0.74RNPAX New PerspectivePairCorr
  0.82RNPHX New PerspectivePairCorr
  0.82RNPGX New PerspectivePairCorr
  0.82RNPCX New PerspectivePairCorr
  0.82RNPFX New PerspectivePairCorr
  0.82RNPEX New PerspectivePairCorr
  0.78AMRMX American MutualPairCorr
  0.78AMRFX American MutualPairCorr
  0.87RNRPX American Funds RetirementPairCorr

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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