Correlation Between American Century and Aberdeen Small
Can any of the company-specific risk be diversified away by investing in both American Century and Aberdeen Small 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 Aberdeen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century High and Aberdeen Small Cap, you can compare the effects of market volatilities on American Century and Aberdeen Small 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 Aberdeen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Aberdeen Small.
Diversification Opportunities for American Century and Aberdeen Small
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Aberdeen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Century High and Aberdeen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Small Cap 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 High are associated (or correlated) with Aberdeen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Small Cap has no effect on the direction of American Century i.e., American Century and Aberdeen Small go up and down completely randomly.
Pair Corralation between American Century and Aberdeen Small
Assuming the 90 days horizon American Century is expected to generate 3.55 times less return on investment than Aberdeen Small. But when comparing it to its historical volatility, American Century High is 6.93 times less risky than Aberdeen Small. It trades about 0.08 of its potential returns per unit of risk. Aberdeen Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,773 in Aberdeen Small Cap on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Aberdeen Small Cap or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century High vs. Aberdeen Small Cap
Performance |
| Timeline |
| American Century High |
| Aberdeen Small Cap |
American Century and Aberdeen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Aberdeen Small
The main advantage of trading using opposite American Century and Aberdeen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Aberdeen Small 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 Aberdeen Small will offset losses from the drop in Aberdeen Small's long position.| American Century vs. Smallcap Growth Fund | American Century vs. Df Dent Small | American Century vs. Touchstone Small Cap | American Century vs. Aqr Small Cap |
| Aberdeen Small vs. Guggenheim Managed Futures | Aberdeen Small vs. Loomis Sayles Inflation | Aberdeen Small vs. Ab Bond Inflation | Aberdeen Small vs. Short Duration Inflation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |