Correlation Between American Century and International Growth
Can any of the company-specific risk be diversified away by investing in both American Century and International 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 International Growth 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 International Growth Fund, you can compare the effects of market volatilities on American Century and International 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 International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and International Growth.
Diversification Opportunities for American Century and International Growth
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and International is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Century Ultra and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International 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 Ultra are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of American Century i.e., American Century and International Growth go up and down completely randomly.
Pair Corralation between American Century and International Growth
Assuming the 90 days horizon American Century Ultra is expected to generate 1.21 times more return on investment than International Growth. However, American Century is 1.21 times more volatile than International Growth Fund. It trades about 0.09 of its potential returns per unit of risk. International Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 7,603 in American Century Ultra on August 31, 2024 and sell it today you would earn a total of 3,050 from holding American Century Ultra or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
American Century Ultra vs. International Growth Fund
Performance |
| Timeline |
| American Century Ultra |
| International Growth |
American Century and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and International Growth
The main advantage of trading using opposite American Century and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, International 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 International Growth will offset losses from the drop in International Growth's long position.| American Century vs. Energy Basic Materials | American Century vs. Goehring Rozencwajg Resources | American Century vs. Icon Natural Resources | American Century vs. Energy Services Fund |
| International Growth vs. Value Fund Investor | International Growth vs. Ultra Fund Investor | International Growth vs. Growth Fund Investor | International Growth vs. Income Growth Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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