Correlation Between American Funds and Pro-blend(r) Extended
Can any of the company-specific risk be diversified away by investing in both American Funds and Pro-blend(r) Extended 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 Funds and Pro-blend(r) Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Pro Blend Extended Term, you can compare the effects of market volatilities on American Funds and Pro-blend(r) Extended 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 Funds with a short position of Pro-blend(r) Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Pro-blend(r) Extended.
Diversification Opportunities for American Funds and Pro-blend(r) Extended
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Pro-blend(r) is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Pro Blend Extended Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Extended and American Funds 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 Funds American are associated (or correlated) with Pro-blend(r) Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Extended has no effect on the direction of American Funds i.e., American Funds and Pro-blend(r) Extended go up and down completely randomly.
Pair Corralation between American Funds and Pro-blend(r) Extended
Assuming the 90 days horizon American Funds American is expected to generate 0.98 times more return on investment than Pro-blend(r) Extended. However, American Funds American is 1.02 times less risky than Pro-blend(r) Extended. It trades about 0.26 of its potential returns per unit of risk. Pro Blend Extended Term is currently generating about 0.1 per unit of risk. If you would invest 3,556 in American Funds American on June 8, 2025 and sell it today you would earn a total of 246.00 from holding American Funds American or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Pro Blend Extended Term
Performance |
| Timeline |
| American Funds American |
| Pro-blend(r) Extended |
American Funds and Pro-blend(r) Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Pro-blend(r) Extended
The main advantage of trading using opposite American Funds and Pro-blend(r) Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Pro-blend(r) Extended 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 Pro-blend(r) Extended will offset losses from the drop in Pro-blend(r) Extended's long position.| American Funds vs. Prudential Qma Large Cap | American Funds vs. Fidelity Large Cap | American Funds vs. Aqr Large Cap | American Funds vs. Dana Large Cap |
| Pro-blend(r) Extended vs. Manning Napier Credit | Pro-blend(r) Extended vs. Manning Napier Core | Pro-blend(r) Extended vs. Manning Napier Core | Pro-blend(r) Extended vs. Manning Napier Credit |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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