Correlation Between 361 Global and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both 361 Global 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 361 Global and Amcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Global Longshort and Amcap Fund Class, you can compare the effects of market volatilities on 361 Global 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 361 Global with a short position of Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Global and Amcap Fund.
Diversification Opportunities for 361 Global and Amcap Fund
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 361 and Amcap is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding 361 Global Longshort 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 361 Global 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 361 Global Longshort 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 361 Global i.e., 361 Global and Amcap Fund go up and down completely randomly.
Pair Corralation between 361 Global and Amcap Fund
Assuming the 90 days horizon 361 Global Longshort is expected to generate 0.62 times more return on investment than Amcap Fund. However, 361 Global Longshort is 1.6 times less risky than Amcap Fund. It trades about 0.11 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.02 per unit of risk. If you would invest 1,215 in 361 Global Longshort on October 22, 2024 and sell it today you would earn a total of 12.00 from holding 361 Global Longshort or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
361 Global Longshort vs. Amcap Fund Class
Performance |
Timeline |
361 Global Longshort |
Amcap Fund Class |
361 Global and Amcap Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 361 Global and Amcap Fund
The main advantage of trading using opposite 361 Global and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Global 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.361 Global vs. Global Diversified Income | 361 Global vs. Putnam Diversified Income | 361 Global vs. Federated Hermes Conservative | 361 Global vs. Tiaa Cref Lifestyle Conservative |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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