Correlation Between Balanced Fund and Aam Select
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Aam Select 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 Balanced Fund and Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Aam Select Income, you can compare the effects of market volatilities on Balanced Fund and Aam Select 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 Balanced Fund with a short position of Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Aam Select.
Diversification Opportunities for Balanced Fund and Aam Select
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Aam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Balanced Fund i.e., Balanced Fund and Aam Select go up and down completely randomly.
Pair Corralation between Balanced Fund and Aam Select
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 1.78 times more return on investment than Aam Select. However, Balanced Fund is 1.78 times more volatile than Aam Select Income. It trades about 0.2 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.25 per unit of risk. If you would invest 1,833 in Balanced Fund Investor on February 13, 2024 and sell it today you would earn a total of 41.00 from holding Balanced Fund Investor or generate 2.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Balanced Fund Investor vs. Aam Select Income
Performance |
Timeline |
Balanced Fund Investor |
Aam Select Income |
Balanced Fund and Aam Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Balanced Fund and Aam Select
The main advantage of trading using opposite Balanced Fund and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.Balanced Fund vs. American Funds American | Balanced Fund vs. American Funds American | Balanced Fund vs. American Balanced | Balanced Fund vs. American Balanced Fund |
Aam Select vs. Vanguard Intermediate Term Porate | Aam Select vs. Vanguard Intermediate Term Investment Grade | Aam Select vs. Vanguard Intermediate Term Porate | Aam Select vs. Investment Grade Porate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |