Correlation Between American Mutual and Short Term
Can any of the company-specific risk be diversified away by investing in both American Mutual and Short Term 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 Short Term 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 Short Term Bond Fund, you can compare the effects of market volatilities on American Mutual and Short Term 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 Short Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Short Term.
Diversification Opportunities for American Mutual and Short Term
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Short is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Short Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Bond 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 Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Bond has no effect on the direction of American Mutual i.e., American Mutual and Short Term go up and down completely randomly.
Pair Corralation between American Mutual and Short Term
Assuming the 90 days horizon American Mutual is expected to generate 1.13 times less return on investment than Short Term. In addition to that, American Mutual is 5.99 times more volatile than Short Term Bond Fund. It trades about 0.02 of its total potential returns per unit of risk. Short Term Bond Fund is currently generating about 0.16 per unit of volatility. If you would invest 927.00 in Short Term Bond Fund on September 24, 2024 and sell it today you would earn a total of 25.00 from holding Short Term Bond Fund or generate 2.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
American Mutual Fund vs. Short Term Bond Fund
Performance |
Timeline |
American Mutual |
Short Term Bond |
American Mutual and Short Term Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Mutual and Short Term
The main advantage of trading using opposite American Mutual and Short Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Short Term 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 Short Term will offset losses from the drop in Short Term's long position.American Mutual vs. Income Fund Of | American Mutual vs. New World Fund | American Mutual vs. American Mutual Fund | American Mutual vs. American Funds Income |
Short Term vs. Income Fund Of | Short Term vs. New World Fund | Short Term vs. American Mutual Fund | Short Term vs. American Mutual Fund |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Transaction History View history of all your transactions and understand their impact on performance | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |