Correlation Between Barings Active and American Century
Can any of the company-specific risk be diversified away by investing in both Barings Active and American Century 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 Barings Active and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and American Century California, you can compare the effects of market volatilities on Barings Active and American Century 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 Barings Active with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and American Century.
Diversification Opportunities for Barings Active and American Century
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and American Century California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Cal and Barings Active 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 Barings Active Short are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Cal has no effect on the direction of Barings Active i.e., Barings Active and American Century go up and down completely randomly.
Pair Corralation between Barings Active and American Century
Assuming the 90 days horizon Barings Active Short is expected to generate 1.32 times more return on investment than American Century. However, Barings Active is 1.32 times more volatile than American Century California. It trades about 0.25 of its potential returns per unit of risk. American Century California is currently generating about 0.11 per unit of risk. If you would invest 843.00 in Barings Active Short on September 1, 2024 and sell it today you would earn a total of 82.00 from holding Barings Active Short or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Barings Active Short vs. American Century California
Performance |
| Timeline |
| Barings Active Short |
| American Century Cal |
Barings Active and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and American Century
The main advantage of trading using opposite Barings Active and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
| American Century vs. World Energy Fund | American Century vs. Gmo Resources | American Century vs. Gamco Natural Resources | American Century vs. Oil Gas Ultrasector |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |