Correlation Between International Growth and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both International Growth and Amcap 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 International Growth and Amcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Growth Fund and Amcap Fund Class, you can compare the effects of market volatilities on International Growth and Amcap 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 International Growth with a short position of Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Growth and Amcap Fund.
Diversification Opportunities for International Growth and Amcap Fund
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Amcap is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding International Growth Fund and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class and International Growth 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 International Growth Fund are associated (or correlated) with Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of International Growth i.e., International Growth and Amcap Fund go up and down completely randomly.
Pair Corralation between International Growth and Amcap Fund
Assuming the 90 days horizon International Growth Fund is expected to under-perform the Amcap Fund. In addition to that, International Growth is 1.14 times more volatile than Amcap Fund Class. It trades about -0.02 of its total potential returns per unit of risk. Amcap Fund Class is currently generating about 0.18 per unit of volatility. If you would invest 4,259 in Amcap Fund Class on September 12, 2024 and sell it today you would earn a total of 383.00 from holding Amcap Fund Class or generate 8.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
International Growth Fund vs. Amcap Fund Class
Performance |
Timeline |
International Growth |
Amcap Fund Class |
International Growth and Amcap Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with International Growth and Amcap Fund
The main advantage of trading using opposite International Growth and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Growth position performs unexpectedly, Amcap 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.International Growth vs. Europacific Growth Fund | International Growth vs. SCOR PK | International Growth vs. Morningstar Unconstrained Allocation | International Growth vs. Thrivent High Yield |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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