Correlation Between American Century and FlexShares Core
Can any of the company-specific risk be diversified away by investing in both American Century and FlexShares Core 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 FlexShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Investments and FlexShares Core Select, you can compare the effects of market volatilities on American Century and FlexShares Core 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 FlexShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and FlexShares Core.
Diversification Opportunities for American Century and FlexShares Core
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and FlexShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Century Investments and FlexShares Core Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Core Select 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 Investments are associated (or correlated) with FlexShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Core Select has no effect on the direction of American Century i.e., American Century and FlexShares Core go up and down completely randomly.
Pair Corralation between American Century and FlexShares Core
Given the investment horizon of 90 days American Century Investments is expected to generate 1.27 times more return on investment than FlexShares Core. However, American Century is 1.27 times more volatile than FlexShares Core Select. It trades about 0.06 of its potential returns per unit of risk. FlexShares Core Select is currently generating about 0.03 per unit of risk. If you would invest 3,427 in American Century Investments on September 2, 2024 and sell it today you would earn a total of 491.00 from holding American Century Investments or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.94% |
| Values | Daily Returns |
American Century Investments vs. FlexShares Core Select
Performance |
| Timeline |
| American Century Inv |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FlexShares Core Select |
American Century and FlexShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and FlexShares Core
The main advantage of trading using opposite American Century and FlexShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, FlexShares Core 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 FlexShares Core will offset losses from the drop in FlexShares Core's long position.| American Century vs. SPDR Bloomberg Barclays | American Century vs. First Trust TCW | American Century vs. American Century ETF | American Century vs. BNY Mellon ETF |
| FlexShares Core vs. Schwab International Equity | FlexShares Core vs. Schwab Emerging Markets | FlexShares Core vs. Schwab Short Term Treasury | FlexShares Core vs. Schwab TIPS ETF |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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