Correlation Between Xtrackers High and American Century
Can any of the company-specific risk be diversified away by investing in both Xtrackers High 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 Xtrackers High and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers High Beta and American Century ETF, you can compare the effects of market volatilities on Xtrackers High 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 Xtrackers High with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers High and American Century.
Diversification Opportunities for Xtrackers High and American Century
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers High Beta and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF and Xtrackers High 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 Xtrackers High Beta 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 ETF has no effect on the direction of Xtrackers High i.e., Xtrackers High and American Century go up and down completely randomly.
Pair Corralation between Xtrackers High and American Century
Given the investment horizon of 90 days Xtrackers High Beta is expected to generate 1.17 times more return on investment than American Century. However, Xtrackers High is 1.17 times more volatile than American Century ETF. It trades about 0.14 of its potential returns per unit of risk. American Century ETF is currently generating about 0.12 per unit of risk. If you would invest 3,313 in Xtrackers High Beta on November 30, 2024 and sell it today you would earn a total of 940.00 from holding Xtrackers High Beta or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers High Beta vs. American Century ETF
Performance |
| Timeline |
| Xtrackers High Beta |
| American Century ETF |
Xtrackers High and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers High and American Century
The main advantage of trading using opposite Xtrackers High and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers High 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.| Xtrackers High vs. Xtrackers Short Duration | Xtrackers High vs. FlexShares High Yield | Xtrackers High vs. Xtrackers Low Beta | Xtrackers High vs. iShares Edge High |
| American Century vs. BondBloxx ETF Trust | American Century vs. Virtus ETF Trust | American Century vs. Virtus ETF Trust | American Century vs. WisdomTree Emerging Markets |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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