Correlation Between Income Fund and American Mutual
Can any of the company-specific risk be diversified away by investing in both Income Fund and American Mutual 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 Income Fund and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and American Mutual Fund, you can compare the effects of market volatilities on Income Fund and American Mutual 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 Income Fund with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and American Mutual.
Diversification Opportunities for Income Fund and American Mutual
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Income and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Income 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 Income Fund Of are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Income Fund i.e., Income Fund and American Mutual go up and down completely randomly.
Pair Corralation between Income Fund and American Mutual
Assuming the 90 days horizon Income Fund Of is expected to generate 0.84 times more return on investment than American Mutual. However, Income Fund Of is 1.19 times less risky than American Mutual. It trades about 0.25 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.18 per unit of risk. If you would invest 2,670 in Income Fund Of on June 7, 2025 and sell it today you would earn a total of 50.00 from holding Income Fund Of or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. American Mutual Fund
Performance |
| Timeline |
| Income Fund |
| American Mutual |
Income Fund and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and American Mutual
The main advantage of trading using opposite Income Fund and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual's long position.| Income Fund vs. Madison Diversified Income | Income Fund vs. Fuller Thaler Behavioral | Income Fund vs. Aqr Diversified Arbitrage | Income Fund vs. Tiaa Cref Small Cap Equity |
| American Mutual vs. First Eagle Gold | American Mutual vs. World Precious Minerals | American Mutual vs. Franklin Gold Precious | American Mutual vs. Invesco Gold Special |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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