Correlation Between American Century and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both American Century and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on American Century and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Nebraska Municipal.
Diversification Opportunities for American Century and Nebraska Municipal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Nebraska is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Century Etf and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of American Century i.e., American Century and Nebraska Municipal go up and down completely randomly.
Pair Corralation between American Century and Nebraska Municipal
Assuming the 90 days horizon American Century Etf is expected to generate 5.27 times more return on investment than Nebraska Municipal. However, American Century is 5.27 times more volatile than Nebraska Municipal Fund. It trades about 0.18 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.18 per unit of risk. If you would invest 1,754 in American Century Etf on August 25, 2024 and sell it today you would earn a total of 131.00 from holding American Century Etf or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century Etf vs. Nebraska Municipal Fund
Performance |
| Timeline |
| American Century Etf |
| Nebraska Municipal |
American Century and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Nebraska Municipal
The main advantage of trading using opposite American Century and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| American Century vs. Avantis International Small | American Century vs. American Century Etf | American Century vs. Avantis International Equity | American Century vs. Avantis Emerging Markets |
| Nebraska Municipal vs. Ultramid Cap Profund Ultramid Cap | Nebraska Municipal vs. Mid Cap Value Profund | Nebraska Municipal vs. American Century Etf | Nebraska Municipal vs. Pace Smallmedium Value |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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