Correlation Between American Funds and New Perspective

By analyzing existing cross correlation between American Funds Capital and New Perspective you can compare the effects of market volatilities on American Funds and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and New Perspective.

Specify exactly 2 symbols:

Can any of the company-specific risk be diversified away by investing in both American Funds and New Perspective at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing American Funds and New Perspective into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for American Funds and New Perspective

0.73
Correlation
<div class='circular--portrait-small' style='font-weight: 700;background:#000000;color: #f2f2f2;font-size:1.1em;padding-top: 10px;;'>AF</div>
NP

Poor diversification

The 3 months correlation between American and NPFFX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Capital World and New Perspective Fund Class F 1 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 Capital are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of American Funds i.e. American Funds and New Perspective go up and down completely randomly.

Pair Corralation between American Funds and New Perspective

Assuming 30 trading days horizon, American Funds Capital is expected to generate 1.9 times more return on investment than New Perspective. However, American Funds is 1.9 times more volatile than New Perspective. It trades about 0.03 of its potential returns per unit of risk. New Perspective is currently generating about 0.02 per unit of risk. If you would invest  4,955  in American Funds Capital on May 3, 2020 and sell it today you would lose (244.00)  from holding American Funds Capital or give up 4.92% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

American Funds Capital World  vs.  New Perspective Fund Class F 1

 Performance (%) 
      Timeline 
American Funds Capital 
11

Risk-Adjusted Fund Performance

Compared to the overall equity markets, risk-adjusted returns on investments in American Funds Capital are ranked lower than 1 (%) of all funds and portfolios of funds over the last 30 days. Inspite fairly weak basic indicators, American Funds showed solid returns over the last few months and may actually be approaching a breakup point.
New Perspective 
11

Risk-Adjusted Fund Performance

Compared to the overall equity markets, risk-adjusted returns on investments in New Perspective are ranked lower than 1 (%) of all funds and portfolios of funds over the last 30 days. Inspite fairly strong basic indicators, New Perspective is not utilizing all of its potentials. The current stock price disturbance, may contribute to short term losses for the investors.

American Funds and New Perspective Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Shere Portfolio module to track or share privately all of your investments from the convenience of any device.


 
Macroaxis is not a registered investment advisor or broker/dealer. All investments, including stocks, funds, ETFs, or cryptocurrencies, are speculative and involve substantial risk of loss. We encourage our investors to invest carefully. Much of our information is derived directly from data published by companies or submitted to governmental agencies which we believe are reliable, but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations. Also, note that past performance is not necessarily indicative of future results. All investments carry risk, and all investment decisions of an individual remain the responsibility of that individual. There is no guarantee that systems, indicators, or signals will result in profits or that they will not result in losses. All investors are advised to fully understand all risks associated with any investing they choose to do. Hypothetical or simulated performance is not indicative of future results. We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown because hypothetical or simulated performance is not necessarily indicative of future results. For more information please visit our terms and condition page