Correlation Between Scout Unconstrained and American Funds

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

By analyzing existing cross correlation between Scout Unconstrained Bond and American Funds Strategic, you can compare the effects of market volatilities on Scout Unconstrained 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 Scout Unconstrained with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Unconstrained and American Funds.

Diversification Opportunities for Scout Unconstrained and American Funds

0.0

Correlation Coefficient

Scout Unconstrained  American Funds

Pay attention - limited upside

The 3 months correlation between Scout and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scout Unconstrained Bond and American Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Strategic and Scout Unconstrained 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 Scout Unconstrained Bond 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 Strategic has no effect on the direction of Scout Unconstrained i.e., Scout Unconstrained and American Funds go up and down completely randomly.

Pair Corralation between Scout Unconstrained and American Funds

If you would invest  1,207  in Scout Unconstrained Bond on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Scout Unconstrained Bond or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Scout Unconstrained Bond  vs.  American Funds Strategic

Scout Unconstrained Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

American Funds Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Funds Strategic 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.

Pair Trading with Scout Unconstrained and American Funds

The main advantage of trading using opposite Scout Unconstrained and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Unconstrained 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.

The idea behind Scout Unconstrained Bond and American Funds Strategic 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.