Correlation Between American Century and Regional Bank
Can any of the company-specific risk be diversified away by investing in both American Century and Regional Bank 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 Regional Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Etf and Regional Bank Fund, you can compare the effects of market volatilities on American Century and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Regional Bank.
Diversification Opportunities for American Century and Regional Bank
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Regional is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Century Etf and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Etf are associated (or correlated) with Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of American Century i.e., American Century and Regional Bank go up and down completely randomly.
Pair Corralation between American Century and Regional Bank
Assuming the 90 days horizon American Century is expected to generate 1.47 times less return on investment than Regional Bank. But when comparing it to its historical volatility, American Century Etf is 1.33 times less risky than Regional Bank. It trades about 0.08 of its potential returns per unit of risk. Regional Bank Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,925 in Regional Bank Fund on September 2, 2024 and sell it today you would earn a total of 1,258 from holding Regional Bank Fund or generate 65.35% 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 Etf vs. Regional Bank Fund
Performance |
| Timeline |
| American Century Etf |
| Regional Bank |
American Century and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Regional Bank
The main advantage of trading using opposite American Century and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| American Century vs. Fidelity Managed Retirement | American Century vs. Target Retirement 2040 | American Century vs. Blackrock Moderate Prepared | American Century vs. Multimanager Lifestyle Moderate |
| Regional Bank vs. Fidelity Small Cap | Regional Bank vs. Mid Cap Value Profund | Regional Bank vs. Queens Road Small | Regional Bank vs. Ultramid Cap Profund Ultramid Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |