Correlation Between American Balanced and American Balanced
Can any of the company-specific risk be diversified away by investing in both American Balanced and American Balanced 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 Balanced and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and American Balanced, you can compare the effects of market volatilities on American Balanced and American Balanced 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 Balanced with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and American Balanced.
Diversification Opportunities for American Balanced and American Balanced
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and American is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and American Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and American Balanced 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 Balanced Fund are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of American Balanced i.e., American Balanced and American Balanced go up and down completely randomly.
Pair Corralation between American Balanced and American Balanced
Assuming the 90 days horizon American Balanced Fund is expected to generate 1.04 times more return on investment than American Balanced. However, American Balanced is 1.04 times more volatile than American Balanced. It trades about -0.29 of its potential returns per unit of risk. American Balanced is currently generating about -0.35 per unit of risk. If you would invest 3,360 in American Balanced Fund on January 24, 2024 and sell it today you would lose (95.00) from holding American Balanced Fund or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. American Balanced
Performance |
| Timeline |
| American Balanced |
| American Balanced |
American Balanced and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and American Balanced
The main advantage of trading using opposite American Balanced and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, American Balanced 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 Balanced will offset losses from the drop in American Balanced's long position.| American Balanced vs. Income Fund Of | American Balanced vs. New World Fund | American Balanced vs. American Mutual Fund | American Balanced vs. American Mutual Fund |
| American Balanced vs. Income Fund Of | American Balanced vs. New World Fund | American Balanced vs. American Mutual Fund | American Balanced vs. American Mutual Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| CEOs Directory Screen CEOs from public companies around the world |