Correlation Between American Growth and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both American Growth and NYSE Composite 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 Growth and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Growth Fund and NYSE Composite, you can compare the effects of market volatilities on American Growth and NYSE Composite 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 Growth with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Growth and NYSE Composite.
Diversification Opportunities for American Growth and NYSE Composite
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and NYSE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Growth Fund and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and American Growth 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 Growth Fund are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of American Growth i.e., American Growth and NYSE Composite go up and down completely randomly.
Pair Corralation between American Growth and NYSE Composite
Assuming the 90 days horizon American Growth Fund is expected to under-perform the NYSE Composite. In addition to that, American Growth is 1.38 times more volatile than NYSE Composite. It trades about -0.2 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.16 per unit of volatility. If you would invest 1,814,664 in NYSE Composite on February 3, 2024 and sell it today you would lose (44,759) from holding NYSE Composite or give up 2.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
American Growth Fund vs. NYSE Composite
Performance |
Timeline |
American Growth and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
American Growth Fund
Pair trading matchups for American Growth
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with American Growth and NYSE Composite
The main advantage of trading using opposite American Growth and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Growth position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.American Growth vs. Growth Fund Investor | American Growth vs. Ultra Fund Investor | American Growth vs. Heritage Fund Investor | American Growth vs. International Growth Fund |
NYSE Composite vs. Amkor Technology | NYSE Composite vs. MACOM Technology Solutions | NYSE Composite vs. Weibo Corp | NYSE Composite vs. NETGEAR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |