American Funds Correlations

RCATX Fund  USD 11.30  0.01  0.09%   
The correlation of American Funds is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as American Funds moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if American Funds 2010 moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

Very weak diversification

The correlation between AMERICAN FUNDS 2010 and NYA is 0.56 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN FUNDS 2010 and NYA in the same portfolio, assuming nothing else is changed.
Check out Your Equity Center to better understand how to build diversified portfolios, which includes a position in American Funds 2010. Also, note that the market value of any Mutual Fund could be tightly coupled with the direction of predictive economic indicators such as signals in employment.
  
The ability to find closely correlated positions to American Funds could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace American Funds when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back American Funds - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling American Funds 2010 to buy it.

Moving together with American Mutual Fund

  0.7FPTPX American Funds ConsePairCorr

Related Correlations Analysis

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations   
AMFFXAMFCX
RNGEXRNGGX
AMHIXAMECX
AMEFXAMECX
AMHIXAMEFX
RNGEXAMFFX
  
High negative correlations   
FPPPXSTFGX
RNGGXFPPPX
RNGEXFPPPX

Risk-Adjusted Indicators

There is a big difference between American Mutual Fund performing well and American Funds Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze American Funds' multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.
Mean DeviationJensen AlphaSortino RatioTreynor RatioSemi DeviationExpected ShortfallPotential UpsideValue @RiskMaximum Drawdown
STFGX  0.56  0.11 (0.05)(0.21) 1.32 
 1.22 
 8.18 
AMECX  0.36  0.09 (0.14)(0.38) 0.39 
 0.88 
 2.74 
AMFCX  0.37  0.11 (0.10)(0.55) 0.39 
 0.84 
 2.24 
AMFFX  0.37  0.11 (0.09)(0.53) 0.40 
 0.83 
 2.22 
RNCCX  0.30  0.06 (0.17)(1.00) 0.41 
 0.64 
 3.07 
FPPPX  0.17 (0.02)(0.55)(0.01) 0.18 
 0.32 
 1.28 
AMEFX  0.36 (0.04)(0.15) 0.09  0.40 
 0.88 
 2.75 
RNGGX  0.61  0.02 (0.02) 0.17  0.72 
 1.30 
 3.60 
RNGEX  0.61  0.02 (0.02) 0.17  0.69 
 1.31 
 3.34 
AMHIX  0.18  0.07 (0.30)(2.84) 0.00 
 0.47 
 1.76 

Be your own money manager

Our tools can tell you how much better you can do entering a position in American Funds without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Already Invested in American Funds 2010?

The danger of trading American Funds 2010 is mainly related to its market volatility and Mutual Fund specific events. As an investor, you must understand the concept of risk-adjusted return before you start trading. The most common way to measure the risk of American Funds is by using the Sharpe ratio. The ratio expresses how much excess return you acquire for the extra volatility you endure for holding a more risker asset than American Funds. The Shape ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. To understand how volatile American Funds 2010 is, you must compare it to a benchmark. Traditionally, the risk-free rate of return is the rate of return on the shortest-dated U.S. Treasury, such as a 3-year bond.
Check out Your Equity Center to better understand how to build diversified portfolios, which includes a position in American Funds 2010. Also, note that the market value of any Mutual Fund could be tightly coupled with the direction of predictive economic indicators such as signals in employment.
You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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When running American Funds' price analysis, check to measure American Funds' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy American Funds is operating at the current time. Most of American Funds' value examination focuses on studying past and present price action to predict the probability of American Funds' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move American Funds' price. Additionally, you may evaluate how the addition of American Funds to your portfolios can decrease your overall portfolio volatility.
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Please note, there is a significant difference between American Funds' value and its price as these two are different measures arrived at by different means. Investors typically determine if American Funds is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Funds' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.