Correlation Between Kopernik International and American Funds
Can any of the company-specific risk be diversified away by investing in both Kopernik International and American Funds 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 Kopernik International and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik International Fund and American Funds Global, you can compare the effects of market volatilities on Kopernik International and American Funds 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 Kopernik International with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik International and American Funds.
Diversification Opportunities for Kopernik International and American Funds
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kopernik and American is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International Fund and American Funds Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Global and Kopernik International 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 Kopernik International Fund are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Global has no effect on the direction of Kopernik International i.e., Kopernik International and American Funds go up and down completely randomly.
Pair Corralation between Kopernik International and American Funds
Assuming the 90 days horizon Kopernik International Fund is expected to generate 0.6 times more return on investment than American Funds. However, Kopernik International Fund is 1.68 times less risky than American Funds. It trades about 0.04 of its potential returns per unit of risk. American Funds Global is currently generating about -0.11 per unit of risk. If you would invest 1,342 in Kopernik International Fund on December 5, 2024 and sell it today you would earn a total of 20.00 from holding Kopernik International Fund or generate 1.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kopernik International Fund vs. American Funds Global
Performance |
Timeline |
Kopernik International |
American Funds Global |
Kopernik International and American Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kopernik International and American Funds
The main advantage of trading using opposite Kopernik International and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik International position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.Kopernik International vs. Short Oil Gas | Kopernik International vs. Franklin Natural Resources | Kopernik International vs. Clearbridge Energy Mlp | Kopernik International vs. Transamerica Mlp Energy |
American Funds vs. Guidemark Large Cap | American Funds vs. Transamerica Asset Allocation | American Funds vs. The Hartford Servative | American Funds vs. T Rowe Price |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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