Correlation Between American Funds and One Choice
Can any of the company-specific risk be diversified away by investing in both American Funds and One Choice 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 Funds and One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2035 and One Choice 2035, you can compare the effects of market volatilities on American Funds and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and One Choice.
Diversification Opportunities for American Funds and One Choice
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and One is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2035 and One Choice 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice 2035 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 2035 are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice 2035 has no effect on the direction of American Funds i.e., American Funds and One Choice go up and down completely randomly.
Pair Corralation between American Funds and One Choice
Assuming the 90 days horizon American Funds 2035 is expected to under-perform the One Choice. In addition to that, American Funds is 1.04 times more volatile than One Choice 2035. It trades about -0.38 of its total potential returns per unit of risk. One Choice 2035 is currently generating about -0.28 per unit of volatility. If you would invest 1,586 in One Choice 2035 on January 24, 2024 and sell it today you would lose (41.00) from holding One Choice 2035 or give up 2.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
American Funds 2035 vs. One Choice 2035
Performance |
Timeline |
American Funds 2035 |
One Choice 2035 |
American Funds and One Choice Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and One Choice
The main advantage of trading using opposite American Funds and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
One Choice vs. One Choice 2025 | One Choice vs. One Choice 2045 | One Choice vs. One Choice In | One Choice vs. One Choice 2030 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |