Capital World Correlations

RWIFX Fund  USD 64.83  0.37  0.57%   
The correlation of Capital World is a statistical measure of how it moves in relation to other instruments. 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 Capital World moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Capital World Growth 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 poor diversification

The correlation between CAPITAL WORLD GROWTH and NYA is 0.85 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding CAPITAL WORLD GROWTH 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 Capital World Growth. 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 census.
  
The ability to find closely correlated positions to Capital World could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Capital World 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 Capital World - 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 Capital World Growth to buy it.

Moving together with Capital Mutual Fund

  0.99STFGX State Farm GrowthPairCorr
  0.84REJTX American Funds 2015PairCorr
  0.95AMFCX American Mutual FundPairCorr
  0.99AMFFX American Mutual FundPairCorr
  0.89RNCCX American Funds IncomePairCorr
  0.96REITX American Funds 2050PairCorr
  0.96RNGCX New Economy FundPairCorr
  0.95FPTPX American Funds ConsePairCorr
  0.99RERAX Europacific Growth FundPairCorr
  0.97RERGX Europacific Growth FundPairCorr
  0.99RERFX Europacific Growth FundPairCorr
  0.99RERCX Europacific Growth FundPairCorr
  0.97REREX Europacific Growth FundPairCorr
  1.0RWIAX Capital World GrowthPairCorr
  0.98RWIGX Capital World GrowthPairCorr
  0.98RNPGX New Perspective FundPairCorr

Moving against Capital Mutual Fund

  0.5USGFX Us Government SecuritiesPairCorr

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   
AMFFXSTFGX
RNEBXSTFGX
AMFFXRNEBX
REITXSTFGX
AMEFXAMECX
AMFFXAMFCX
  
High negative correlations   
FPPPXRNEBX
FPPPXSTFGX
FPPPXAMFFX
REITXFPPPX

Risk-Adjusted Indicators

There is a big difference between Capital Mutual Fund performing well and Capital World 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 Capital World's 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  0.48  0.02  0.02  0.14  0.29 
 1.10 
 2.82 
AMECX  0.32 (0.02)(0.13) 0.09  0.27 
 0.71 
 1.90 
REJTX  0.35  0.05 (0.10)(0.91) 0.63 
 0.57 
 7.69 
RNEBX  0.46 (0.02)(0.07) 0.11  0.45 
 0.99 
 2.29 
AMFCX  0.37  0.11 (0.09)(0.34) 0.40 
 0.79 
 2.03 
AMFFX  0.36  0.01 (0.04) 0.14  0.21 
 0.85 
 2.05 
RNCCX  0.31  0.04 (0.16)(6.67) 0.44 
 0.56 
 4.11 
FPPPX  0.15 (0.01)(0.55)(0.23) 0.18 
 0.32 
 0.96 
REITX  0.59  0.17  0.06 (3.78) 0.46 
 1.14 
 8.85 
AMEFX  0.33  0.07 (0.13)(0.63) 0.30 
 0.69 
 1.93 

Be your own money manager

Our tools can tell you how much better you can do entering a position in Capital World 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 Capital World Growth?

The danger of trading Capital World Growth 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 Capital World 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 Capital World. The Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. To understand how volatile Capital World Growth 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 Capital World Growth. 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 census.
Note that the Capital World Growth information on this page should be used as a complementary analysis to other Capital World's statistical models used 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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When running Capital World's price analysis, check to measure Capital World's 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 Capital World is operating at the current time. Most of Capital World's value examination focuses on studying past and present price action to predict the probability of Capital World's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Capital World's price. Additionally, you may evaluate how the addition of Capital World to your portfolios can decrease your overall portfolio volatility.
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Please note, there is a significant difference between Capital World's value and its price as these two are different measures arrived at by different means. Investors typically determine if Capital World is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Capital World's 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.