Correlation Between American Century and Ultra Fund
Can any of the company-specific risk be diversified away by investing in both American Century and Ultra Fund 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 Ultra Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Ultra and Ultra Fund Investor, you can compare the effects of market volatilities on American Century and Ultra Fund 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 Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Ultra Fund.
Diversification Opportunities for American Century and Ultra Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Ultra is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Century Ultra and Ultra Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund Investor 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 Ultra are associated (or correlated) with Ultra Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Fund Investor has no effect on the direction of American Century i.e., American Century and Ultra Fund go up and down completely randomly.
Pair Corralation between American Century and Ultra Fund
Assuming the 90 days horizon American Century Ultra is expected to generate 1.0 times more return on investment than Ultra Fund. However, American Century Ultra is 1.0 times less risky than Ultra Fund. It trades about 0.12 of its potential returns per unit of risk. Ultra Fund Investor is currently generating about 0.11 per unit of risk. If you would invest 6,013 in American Century Ultra on September 12, 2024 and sell it today you would earn a total of 5,058 from holding American Century Ultra or generate 84.12% 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 Ultra vs. Ultra Fund Investor
Performance |
| Timeline |
| American Century Ultra |
| Ultra Fund Investor |
American Century and Ultra Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Ultra Fund
The main advantage of trading using opposite American Century and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Ultra Fund 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 Ultra Fund will offset losses from the drop in Ultra Fund's long position.| American Century vs. Heartland Value Plus | American Century vs. Great West Loomis Sayles | American Century vs. Boston Partners Small | American Century vs. Vanguard Small Cap Value |
| Ultra Fund vs. Growth Fund Investor | Ultra Fund vs. Select Fund Investor | Ultra Fund vs. International Growth Fund | Ultra Fund vs. Heritage Fund Investor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |