Correlation Between American Funds and Mercer Us
Can any of the company-specific risk be diversified away by investing in both American Funds and Mercer Us 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 Mercer Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2030 and Mercer Smallmid Cap, you can compare the effects of market volatilities on American Funds and Mercer Us 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 Mercer Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mercer Us.
Diversification Opportunities for American Funds and Mercer Us
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Mercer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2030 and Mercer Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercer Smallmid Cap 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 2030 are associated (or correlated) with Mercer Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercer Smallmid Cap has no effect on the direction of American Funds i.e., American Funds and Mercer Us go up and down completely randomly.
Pair Corralation between American Funds and Mercer Us
If you would invest 1,131 in Mercer Smallmid Cap on June 9, 2024 and sell it today you would earn a total of 21.00 from holding Mercer Smallmid Cap or generate 1.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
American Funds 2030 vs. Mercer Smallmid Cap
Performance |
Timeline |
American Funds 2030 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Mercer Smallmid Cap |
American Funds and Mercer Us Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Mercer Us
The main advantage of trading using opposite American Funds and Mercer Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mercer Us 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 Mercer Us will offset losses from the drop in Mercer Us' long position.American Funds vs. Barings Active Short | American Funds vs. Short Intermediate Bond Fund | American Funds vs. Touchstone Ultra Short | American Funds vs. Abr Enhanced Short |
Mercer Us vs. Vanguard Small Cap Index | Mercer Us vs. Vanguard Small Cap Index | Mercer Us vs. Vanguard Small Cap Index | Mercer Us vs. Vanguard Small Cap Index |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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