Correlation Between American High and American Mutual
Can any of the company-specific risk be diversified away by investing in both American High 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 American High and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income Municipal and American Mutual Fund, you can compare the effects of market volatilities on American High 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 American High with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and American Mutual.
Diversification Opportunities for American High and American Mutual
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American High Income Municipal and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and American High 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 High Income Municipal 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 American High i.e., American High and American Mutual go up and down completely randomly.
Pair Corralation between American High and American Mutual
Assuming the 90 days horizon American High Income Municipal is expected to generate 0.35 times more return on investment than American Mutual. However, American High Income Municipal is 2.85 times less risky than American Mutual. It trades about 0.37 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.12 per unit of risk. If you would invest 1,473 in American High Income Municipal on August 15, 2025 and sell it today you would earn a total of 64.00 from holding American High Income Municipal or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American High Income Municipal vs. American Mutual Fund
Performance |
| Timeline |
| American High Income |
| American Mutual |
American High and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and American Mutual
The main advantage of trading using opposite American High and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High 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.| American High vs. Riverparknext Century Growth | American High vs. Harbor Small Cap | American High vs. Stringer Growth Fund | American High vs. Growth Allocation Fund |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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