Correlation Between American Century and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both American Century and Catalyst/millburn 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 Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on American Century and Catalyst/millburn 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 Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Catalyst/millburn.
Diversification Opportunities for American Century and Catalyst/millburn
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Catalyst/millburn is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Century Etf and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of American Century i.e., American Century and Catalyst/millburn go up and down completely randomly.
Pair Corralation between American Century and Catalyst/millburn
Assuming the 90 days horizon American Century Etf is expected to generate 1.5 times more return on investment than Catalyst/millburn. However, American Century is 1.5 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.24 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.2 per unit of risk. If you would invest 1,719 in American Century Etf on October 25, 2024 and sell it today you would earn a total of 67.00 from holding American Century Etf or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century Etf vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| American Century Etf |
| Catalystmillburn Hedge |
American Century and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Catalyst/millburn
The main advantage of trading using opposite American Century and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn's long position.| American Century vs. Large Cap Growth Profund | American Century vs. Ab Large Cap | American Century vs. Blackrock Large Cap | American Century vs. Nuveen Nwq Large Cap |
| Catalyst/millburn vs. Heartland Value Plus | Catalyst/millburn vs. William Blair Small | Catalyst/millburn vs. Mutual Of America | Catalyst/millburn vs. American Century 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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