Correlation Between American Mutual and Voya Jpmorgan

Can any of the company-specific risk be diversified away by investing in both American Mutual and Voya Jpmorgan 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 Voya Jpmorgan 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 Voya Jpmorgan Small, you can compare the effects of market volatilities on American Mutual and Voya Jpmorgan 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 Voya Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Voya Jpmorgan.

Diversification Opportunities for American Mutual and Voya Jpmorgan

0.25

Correlation Coefficient

American Mutual  Voya Jpmorgan

Modest diversification

The 3 months correlation between American and Voya is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Voya Jpmorgan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Jpmorgan Small 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 Voya Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Jpmorgan Small has no effect on the direction of American Mutual i.e., American Mutual and Voya Jpmorgan go up and down completely randomly.

Pair Corralation between American Mutual and Voya Jpmorgan

Assuming the 90 days horizon American Mutual Fund is expected to generate 0.6 times more return on investment than Voya Jpmorgan. However, American Mutual Fund is 1.67 times less risky than Voya Jpmorgan. It trades about 0.07 of its potential returns per unit of risk. Voya Jpmorgan Small is currently generating about -0.13 per unit of risk. If you would invest  5,463  in American Mutual Fund on December 29, 2024 and sell it today you would earn a total of  148.00  from holding American Mutual Fund or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

American Mutual Fund  vs.  Voya Jpmorgan Small

American Mutual

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Mutual Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, American Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Jpmorgan Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Jpmorgan Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with American Mutual and Voya Jpmorgan

The main advantage of trading using opposite American Mutual and Voya Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Voya Jpmorgan 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 Voya Jpmorgan will offset losses from the drop in Voya Jpmorgan's long position.

The idea behind American Mutual Fund and Voya Jpmorgan Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.