American Balanced Correlations

Mutual Funds . USA . 
Fund . American Balanced
ABALX Fund  USD 34.46  0.03  0.09%   
The current 90-days correlation between American Balanced and Income Fund Of is 0.89 (i.e., Very poor diversification). The correlation of American Balanced 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 Balanced Correlation With Market

Poor diversification

The correlation between American Balanced and DJI is 0.6 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and DJI in the same portfolio, assuming nothing else is changed.
  
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in American Balanced. 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 bureau of economic analysis.

Moving together with American Mutual Fund

  0.88AMFCX American MutualPairCorr
  0.88AMFFX American MutualPairCorr
  0.86RNGHX New Economy FundPairCorr
  0.84RNGBX New Economy FundPairCorr
  0.86RNGEX New Economy FundPairCorr
  0.91CDJAX American Funds CollegePairCorr
  0.83AMPFX Amcap Fund ClassPairCorr
  0.87RNPBX New PerspectivePairCorr
  0.87RNPAX New PerspectivePairCorr
  0.88RNPHX New PerspectivePairCorr
  0.88RNPGX New PerspectivePairCorr
  0.88RNPFX New PerspectivePairCorr
  0.88RNPEX New PerspectivePairCorr
  0.88AMRMX American MutualPairCorr
  0.61RNWBX New World FundPairCorr
  0.61RNWAX New World FundPairCorr
  0.85ANCFX American Funds FundaPairCorr
  0.84ANFCX New Economy FundPairCorr
  0.86ANEFX New Economy FundPairCorr
  0.86ANFFX New Economy FundPairCorr
  0.88NPFFX New PerspectivePairCorr

Related Correlations Analysis

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations   
CAIBX
+ 0.95
AMECX
ANWPX
+ 0.89
CWGIX
ANWPX
+ 0.79
AGTHX
CWGIX
+ 0.67
AMECX
AGTHX
+ 0.65
CWGIX
CWGIX
+ 0.48
CAIBX
  
High negative correlations   
AGTHX
- 0.16
CAIBX

Risk-Adjusted Indicators

There is a big difference between American Mutual Fund performing well and American Balanced 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 Balanced's 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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