Correlation Between American Century and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Century and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on American Century and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Growth Fund.
Diversification Opportunities for American Century and Growth Fund
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Growth is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Century One and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of American Century i.e., American Century and Growth Fund go up and down completely randomly.
Pair Corralation between American Century and Growth Fund
Assuming the 90 days horizon American Century One is expected to generate 0.73 times more return on investment than Growth Fund. However, American Century One is 1.37 times less risky than Growth Fund. It trades about -0.03 of its potential returns per unit of risk. Growth Fund Of is currently generating about -0.07 per unit of risk. If you would invest 1,140 in American Century One on November 27, 2024 and sell it today you would lose (5.00) from holding American Century One or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century One vs. Growth Fund Of
Performance |
| Timeline |
| American Century One |
| Growth Fund |
American Century and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Growth Fund
The main advantage of trading using opposite American Century and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| American Century vs. Forum Funds | American Century vs. Calamos Vertible Fund | American Century vs. Virtus Convertible | American Century vs. Franklin Vertible Securities |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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