Correlation Between American Mutual and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Mutual and Growth 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 American Mutual and Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on American Mutual and Growth 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 American Mutual with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Growth Fund.
Diversification Opportunities for American Mutual and Growth Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Growth is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of American Mutual i.e., American Mutual and Growth Fund go up and down completely randomly.
Pair Corralation between American Mutual and Growth Fund
Assuming the 90 days horizon American Mutual is expected to generate 11.66 times less return on investment than Growth Fund. But when comparing it to its historical volatility, American Mutual Fund is 1.59 times less risky than Growth Fund. It trades about 0.03 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7,547 in Growth Fund Of on September 15, 2024 and sell it today you would earn a total of 888.00 from holding Growth Fund Of or generate 11.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
American Mutual Fund vs. Growth Fund Of
Performance |
Timeline |
American Mutual |
Growth Fund |
American Mutual and Growth Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Mutual and Growth Fund
The main advantage of trading using opposite American Mutual and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
Growth Fund vs. T Rowe Price | Growth Fund vs. The National Tax Free | Growth Fund vs. Ambrus Core Bond | Growth Fund vs. Touchstone Premium Yield |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |