Correlation Between American Century and Valic Company
Can any of the company-specific risk be diversified away by investing in both American Century and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on American Century and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Valic Company.
Diversification Opportunities for American Century and Valic Company
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Valic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Century High and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of American Century i.e., American Century and Valic Company go up and down completely randomly.
Pair Corralation between American Century and Valic Company
Assuming the 90 days horizon American Century is expected to generate 1.02 times less return on investment than Valic Company. In addition to that, American Century is 1.12 times more volatile than Valic Company I. It trades about 0.23 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.26 per unit of volatility. If you would invest 688.00 in Valic Company I on September 2, 2024 and sell it today you would earn a total of 41.00 from holding Valic Company I or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century High vs. Valic Company I
Performance |
| Timeline |
| American Century High |
| Valic Company I |
American Century and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Valic Company
The main advantage of trading using opposite American Century and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| American Century vs. Tekla Healthcare Opportunities | American Century vs. Invesco Global Health | American Century vs. Health Care Fund | American Century vs. Live Oak Health |
| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Stock Index Fund | Valic Company vs. Broad Cap Value |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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