Correlation Between American Funds and Eagle Mlp

Can any of the company-specific risk be diversified away by investing in both American Funds and Eagle Mlp 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 Eagle Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Funds Income and Eagle Mlp Strategy, you can compare the effects of market volatilities on American Funds and Eagle Mlp 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 Eagle Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Eagle Mlp.

Diversification Opportunities for American Funds and Eagle Mlp

0.18

Correlation Coefficient

American Funds  Eagle Mlp

Average diversification

The 3 months correlation between American and Eagle is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Income and Eagle Mlp Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mlp Strategy 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 Income are associated (or correlated) with Eagle Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mlp Strategy has no effect on the direction of American Funds i.e., American Funds and Eagle Mlp go up and down completely randomly.

Pair Corralation between American Funds and Eagle Mlp

Assuming the 90 days horizon American Funds Income is expected to generate 0.32 times more return on investment than Eagle Mlp. However, American Funds Income is 3.08 times less risky than Eagle Mlp. It trades about -0.06 of its potential returns per unit of risk. Eagle Mlp Strategy is currently generating about -0.22 per unit of risk. If you would invest  1,358  in American Funds Income on September 21, 2024 and sell it today you would lose (8.00) from holding American Funds Income or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

American Funds Income  vs.  Eagle Mlp Strategy

American Funds Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Funds Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, American Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Mlp Strategy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mlp Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eagle Mlp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American Funds and Eagle Mlp

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

The idea behind American Funds Income and Eagle Mlp Strategy 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.