Correlation Between Roumell Opportunistic and American Funds
Can any of the company-specific risk be diversified away by investing in both Roumell Opportunistic and American Funds 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 Roumell Opportunistic and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roumell Opportunistic Value and American Funds Balanced, you can compare the effects of market volatilities on Roumell Opportunistic and American Funds 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 Roumell Opportunistic with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roumell Opportunistic and American Funds.
Diversification Opportunities for Roumell Opportunistic and American Funds
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Roumell and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Roumell Opportunistic Value and American Funds Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Balanced and Roumell Opportunistic 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 Roumell Opportunistic Value are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Balanced has no effect on the direction of Roumell Opportunistic i.e., Roumell Opportunistic and American Funds go up and down completely randomly.
Pair Corralation between Roumell Opportunistic and American Funds
Assuming the 90 days horizon Roumell Opportunistic Value is expected to under-perform the American Funds. In addition to that, Roumell Opportunistic is 1.31 times more volatile than American Funds Balanced. It trades about -0.16 of its total potential returns per unit of risk. American Funds Balanced is currently generating about -0.2 per unit of volatility. If you would invest 1,743 in American Funds Balanced on January 19, 2024 and sell it today you would lose (39.00) from holding American Funds Balanced or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roumell Opportunistic Value vs. American Funds Balanced
Performance |
| Timeline |
| Roumell Opportunistic |
| American Funds Balanced |
Roumell Opportunistic and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roumell Opportunistic and American Funds
The main advantage of trading using opposite Roumell Opportunistic and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roumell Opportunistic position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Roumell Opportunistic vs. Glg Intl Small | Roumell Opportunistic vs. Lebenthal Lisanti Small | Roumell Opportunistic vs. Vy Columbia Small | Roumell Opportunistic vs. Foundry Partners Fundamental |
| American Funds vs. HUMANA INC | American Funds vs. Aquagold International | American Funds vs. Spring Valley Acquisition |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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