| FNPFX Fund | | | USD 70.44 0.44 0.63% |
The current 90-days correlation between New Perspective and American Balanced Fund is 0.93 (i.e., Almost no diversification). The correlation of New Perspective is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.
New Perspective Correlation With Market
Very poor diversification
The correlation between New Perspective Fund and DJI is 0.84 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and DJI in the same portfolio, assuming nothing else is changed.
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Investing Opportunities to better understand how to build diversified portfolios, which includes a position in New Perspective Fund. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as
signals in census.