Correlation Between Europacific Growth and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Amcap Fund 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 Europacific Growth and Amcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Amcap Fund Class, you can compare the effects of market volatilities on Europacific Growth and Amcap Fund 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 Europacific Growth with a short position of Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Amcap Fund.
Diversification Opportunities for Europacific Growth and Amcap Fund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Europacific and Amcap is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class and Europacific 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 Europacific Growth Fund are associated (or correlated) with Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Europacific Growth i.e., Europacific Growth and Amcap Fund go up and down completely randomly.
Pair Corralation between Europacific Growth and Amcap Fund
Assuming the 90 days horizon Europacific Growth is expected to generate 1.88 times less return on investment than Amcap Fund. But when comparing it to its historical volatility, Europacific Growth Fund is 1.01 times less risky than Amcap Fund. It trades about 0.1 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,213 in Amcap Fund Class on June 10, 2025 and sell it today you would earn a total of 372.00 from holding Amcap Fund Class or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Amcap Fund Class
Performance |
| Timeline |
| Europacific Growth |
| Amcap Fund Class |
Europacific Growth and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Amcap Fund
The main advantage of trading using opposite Europacific Growth and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Europacific Growth vs. Growth Fund Of | Europacific Growth vs. Washington Mutual Investors | Europacific Growth vs. American Funds Fundamental | Europacific Growth vs. New World Fund |
| Amcap Fund vs. Europacific Growth Fund | Amcap Fund vs. Capital World Growth | Amcap Fund vs. Washington Mutual Investors | Amcap Fund vs. American Mutual Fund |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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