Correlation Between American Funds and Bruce Fund
Can any of the company-specific risk be diversified away by investing in both American Funds and Bruce 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 American Funds and Bruce Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Bruce Fund Bruce, you can compare the effects of market volatilities on American Funds and Bruce 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 American Funds with a short position of Bruce Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Bruce Fund.
Diversification Opportunities for American Funds and Bruce Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Bruce is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Bruce Fund Bruce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruce Fund Bruce and American Funds 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 Funds The are associated (or correlated) with Bruce Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruce Fund Bruce has no effect on the direction of American Funds i.e., American Funds and Bruce Fund go up and down completely randomly.
Pair Corralation between American Funds and Bruce Fund
Assuming the 90 days horizon American Funds The is expected to generate 0.82 times more return on investment than Bruce Fund. However, American Funds The is 1.22 times less risky than Bruce Fund. It trades about 0.14 of its potential returns per unit of risk. Bruce Fund Bruce is currently generating about 0.08 per unit of risk. If you would invest 2,422 in American Funds The on December 29, 2024 and sell it today you would earn a total of 107.00 from holding American Funds The or generate 4.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
American Funds The vs. Bruce Fund Bruce
Performance |
Timeline |
American Funds |
Bruce Fund Bruce |
American Funds and Bruce Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Bruce Fund
The main advantage of trading using opposite American Funds and Bruce Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Bruce 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 Bruce Fund will offset losses from the drop in Bruce Fund's long position.American Funds vs. Ab International Growth | American Funds vs. Stringer Growth Fund | American Funds vs. Pnc International Growth | American Funds vs. Eip Growth And |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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