Correlation Between American Balanced and Seafarer Overseas
Can any of the company-specific risk be diversified away by investing in both American Balanced and Seafarer Overseas 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 Balanced and Seafarer Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Seafarer Overseas Growth, you can compare the effects of market volatilities on American Balanced and Seafarer Overseas 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 Balanced with a short position of Seafarer Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Seafarer Overseas.
Diversification Opportunities for American Balanced and Seafarer Overseas
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Seafarer is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Seafarer Overseas Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seafarer Overseas Growth and American Balanced 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 Balanced Fund are associated (or correlated) with Seafarer Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seafarer Overseas Growth has no effect on the direction of American Balanced i.e., American Balanced and Seafarer Overseas go up and down completely randomly.
Pair Corralation between American Balanced and Seafarer Overseas
Assuming the 90 days horizon American Balanced Fund is expected to generate 0.76 times more return on investment than Seafarer Overseas. However, American Balanced Fund is 1.31 times less risky than Seafarer Overseas. It trades about 0.13 of its potential returns per unit of risk. Seafarer Overseas Growth is currently generating about 0.06 per unit of risk. If you would invest 3,836 in American Balanced Fund on September 12, 2025 and sell it today you would earn a total of 174.00 from holding American Balanced Fund or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Seafarer Overseas Growth
Performance |
| Timeline |
| American Balanced |
| Seafarer Overseas Growth |
American Balanced and Seafarer Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Seafarer Overseas
The main advantage of trading using opposite American Balanced and Seafarer Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Seafarer Overseas 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 Seafarer Overseas will offset losses from the drop in Seafarer Overseas' long position.| American Balanced vs. Fidelity Series Government | American Balanced vs. Franklin Adjustable Government | American Balanced vs. Us Government Securities | American Balanced vs. Us Government Securities |
| Seafarer Overseas vs. Invesco Technology Fund | Seafarer Overseas vs. Nationwide Bailard Technology | Seafarer Overseas vs. Dreyfus Technology Growth | Seafarer Overseas vs. Franklin Biotechnology Discovery |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |