Correlation Between American Mutual and Ultra Short
Can any of the company-specific risk be diversified away by investing in both American Mutual and Ultra Short 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 Mutual and Ultra Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Ultra Short Fixed Income, you can compare the effects of market volatilities on American Mutual and Ultra Short 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 Mutual with a short position of Ultra Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Ultra Short.
Diversification Opportunities for American Mutual and Ultra Short
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Ultra is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Ultra Short Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Short Fixed and American Mutual 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 Mutual Fund are associated (or correlated) with Ultra Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Short Fixed has no effect on the direction of American Mutual i.e., American Mutual and Ultra Short go up and down completely randomly.
Pair Corralation between American Mutual and Ultra Short
Assuming the 90 days horizon American Mutual Fund is expected to generate 6.47 times more return on investment than Ultra Short. However, American Mutual is 6.47 times more volatile than Ultra Short Fixed Income. It trades about 0.1 of its potential returns per unit of risk. Ultra Short Fixed Income is currently generating about 0.18 per unit of risk. If you would invest 6,077 in American Mutual Fund on September 9, 2025 and sell it today you would earn a total of 240.00 from holding American Mutual Fund or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Ultra Short Fixed Income
Performance |
| Timeline |
| American Mutual |
| Ultra Short Fixed |
American Mutual and Ultra Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Ultra Short
The main advantage of trading using opposite American Mutual and Ultra Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Ultra Short 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 Ultra Short will offset losses from the drop in Ultra Short's long position.| American Mutual vs. American Mutual Fund | American Mutual vs. Vanguard Target Retirement | American Mutual vs. Vanguard Primecap Fund | American Mutual vs. Vanguard Target Retirement |
| Ultra Short vs. Jpmorgan Diversified Fund | Ultra Short vs. Ips Strategic Capital | Ultra Short vs. Semiconductor Ultrasector Profund | Ultra Short vs. Aqr Diversified Arbitrage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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