Correlation Between American Century and Manning Napier
Can any of the company-specific risk be diversified away by investing in both American Century and Manning Napier 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 Manning Napier 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 Manning Napier Overseas, you can compare the effects of market volatilities on American Century and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Manning Napier.
Diversification Opportunities for American Century and Manning Napier
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Manning is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding American Century High and Manning Napier Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Overseas 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Overseas has no effect on the direction of American Century i.e., American Century and Manning Napier go up and down completely randomly.
Pair Corralation between American Century and Manning Napier
Assuming the 90 days horizon American Century is expected to generate 2.77 times less return on investment than Manning Napier. But when comparing it to its historical volatility, American Century High is 3.98 times less risky than Manning Napier. It trades about 0.16 of its potential returns per unit of risk. Manning Napier Overseas is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,407 in Manning Napier Overseas on November 28, 2024 and sell it today you would earn a total of 64.00 from holding Manning Napier Overseas or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century High vs. Manning Napier Overseas
Performance |
| Timeline |
| American Century High |
| Manning Napier Overseas |
American Century and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Manning Napier
The main advantage of trading using opposite American Century and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.| American Century vs. Fkhemx | American Century vs. Rbb Fund | American Century vs. Rational Dividend Capture | American Century vs. Fwnhtx |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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