Correlation Between American Century and Income Growth
Can any of the company-specific risk be diversified away by investing in both American Century and Income Growth 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 Income Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Non Us and Income Growth Fund, you can compare the effects of market volatilities on American Century and Income Growth 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 Income Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Income Growth.
Diversification Opportunities for American Century and Income Growth
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Income is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Century Non Us and Income Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Growth 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 Non Us are associated (or correlated) with Income Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Growth has no effect on the direction of American Century i.e., American Century and Income Growth go up and down completely randomly.
Pair Corralation between American Century and Income Growth
Assuming the 90 days horizon American Century Non Us is expected to under-perform the Income Growth. In addition to that, American Century is 1.15 times more volatile than Income Growth Fund. It trades about -0.3 of its total potential returns per unit of risk. Income Growth Fund is currently generating about 0.26 per unit of volatility. If you would invest 3,736 in Income Growth Fund on August 29, 2024 and sell it today you would earn a total of 181.00 from holding Income Growth Fund or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century Non Us vs. Income Growth Fund
Performance |
| Timeline |
| American Century Non |
| Income Growth |
American Century and Income Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Income Growth
The main advantage of trading using opposite American Century and Income Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Income Growth 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 Income Growth will offset losses from the drop in Income Growth's long position.| American Century vs. Focused International Growth | American Century vs. Small Cap Growth | American Century vs. Disciplined Growth Fund | American Century vs. Large Pany Value |
| Income Growth vs. International Growth Fund | Income Growth vs. Growth Fund Investor | Income Growth vs. Ultra Fund Investor | Income Growth vs. Strategic Allocation Aggressive |
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 Stocks Directory module to find actively traded stocks across global markets.
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