Correlation Between American Century and Altegris Futures
Can any of the company-specific risk be diversified away by investing in both American Century and Altegris Futures 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 Century and Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century One and Altegris Futures Evolution, you can compare the effects of market volatilities on American Century and Altegris Futures 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 Century with a short position of Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Altegris Futures.
Diversification Opportunities for American Century and Altegris Futures
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Altegris is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Century One and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and American Century 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 Century One are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of American Century i.e., American Century and Altegris Futures go up and down completely randomly.
Pair Corralation between American Century and Altegris Futures
Assuming the 90 days horizon American Century One is expected to generate 1.94 times more return on investment than Altegris Futures. However, American Century is 1.94 times more volatile than Altegris Futures Evolution. It trades about 0.08 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about -0.04 per unit of risk. If you would invest 1,114 in American Century One on October 22, 2024 and sell it today you would earn a total of 11.00 from holding American Century One or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century One vs. Altegris Futures Evolution
Performance |
| Timeline |
| American Century One |
| Altegris Futures Evo |
American Century and Altegris Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Altegris Futures
The main advantage of trading using opposite American Century and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.| American Century vs. Tiaa Cref Inflation Link | American Century vs. Ab Bond Inflation | American Century vs. Credit Suisse Managed | American Century vs. Ab Bond Inflation |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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