Correlation Between Great West and American Funds
Can any of the company-specific risk be diversified away by investing in both Great West and American Funds 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 Great West and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Inflation Protected Securities and American Funds New, you can compare the effects of market volatilities on Great West and American Funds 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 Great West with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and American Funds.
Diversification Opportunities for Great West and American Funds
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and American is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New and Great West 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 Great West Inflation Protected Securities are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Great West i.e., Great West and American Funds go up and down completely randomly.
Pair Corralation between Great West and American Funds
Assuming the 90 days horizon Great West Inflation Protected Securities is expected to under-perform the American Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Great West Inflation Protected Securities is 5.05 times less risky than American Funds. The mutual fund trades about -0.02 of its potential returns per unit of risk. The American Funds New is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,404 in American Funds New on September 13, 2025 and sell it today you would earn a total of 381.00 from holding American Funds New or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Inflation Protected vs. American Funds New
Performance |
| Timeline |
| Great West Inflation |
| American Funds New |
Great West and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and American Funds
The main advantage of trading using opposite Great West and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Great West vs. Great West Securefoundation Balanced | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 |
| American Funds vs. Great West Inflation Protected Securities | American Funds vs. Tiaa Cref Inflation Link | American Funds vs. Short Duration Inflation | American Funds vs. Pimco Inflation Response |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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