Capital World Correlations
RWIAX Fund | USD 63.00 0.54 0.86% |
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 0.88 (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.
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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
0.95 | AMECX | Income Fund | PairCorr |
0.97 | RNEBX | New World Fund | PairCorr |
0.96 | AMFCX | American Mutual | PairCorr |
0.97 | AMFFX | American Mutual | PairCorr |
0.92 | RNCCX | American Funds Income | PairCorr |
0.93 | RNGGX | New Economy Fund | PairCorr |
0.93 | RNGFX | New Economy Fund | PairCorr |
0.93 | RNGHX | New Economy Fund | PairCorr |
0.92 | RNGBX | New Economy Fund | PairCorr |
0.92 | RNGAX | New Economy Fund | PairCorr |
0.93 | RNGEX | New Economy Fund | PairCorr |
0.93 | RNGCX | New Economy Fund | PairCorr |
0.63 | AMHIX | American High Income | PairCorr |
0.93 | FPTPX | American Funds Conse | PairCorr |
0.92 | RNPAX | New Perspective | PairCorr |
0.98 | RNPGX | New Perspective | PairCorr |
0.97 | AMRMX | American Mutual | PairCorr |
Related Correlations Analysis
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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.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.Did you try this?
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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 nation. 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.