Correlation Between Catalyst Enhanced and American Century
Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced 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 Catalyst Enhanced and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Enhanced Income and American Century High, you can compare the effects of market volatilities on Catalyst Enhanced 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 Catalyst Enhanced with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and American Century.
Diversification Opportunities for Catalyst Enhanced and American Century
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income and American Century High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century High and Catalyst Enhanced 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 Catalyst Enhanced Income 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 High has no effect on the direction of Catalyst Enhanced i.e., Catalyst Enhanced and American Century go up and down completely randomly.
Pair Corralation between Catalyst Enhanced and American Century
Assuming the 90 days horizon Catalyst Enhanced Income is expected to under-perform the American Century. In addition to that, Catalyst Enhanced is 1.9 times more volatile than American Century High. It trades about -0.04 of its total potential returns per unit of risk. American Century High is currently generating about 0.2 per unit of volatility. If you would invest 869.00 in American Century High on September 5, 2024 and sell it today you would earn a total of 5.00 from holding American Century High or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Enhanced Income vs. American Century High
Performance |
| Timeline |
| Catalyst Enhanced Income |
| American Century High |
Catalyst Enhanced and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Enhanced and American Century
The main advantage of trading using opposite Catalyst Enhanced and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Enhanced 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.| Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalyst Mlp Infrastructure |
| American Century vs. Pace Large Growth | American Century vs. Chase Growth Fund | American Century vs. Smallcap Growth Fund | American Century vs. Goldman Sachs Growth |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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