Correlation Between SPDR Kensho and American Century
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho 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 SPDR Kensho and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho New and American Century Mid, you can compare the effects of market volatilities on SPDR Kensho 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 SPDR Kensho with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and American Century.
Diversification Opportunities for SPDR Kensho and American Century
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and American Century Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Mid and SPDR Kensho 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 SPDR Kensho New 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 Mid has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and American Century go up and down completely randomly.
Pair Corralation between SPDR Kensho and American Century
Given the investment horizon of 90 days SPDR Kensho New is expected to generate 1.27 times more return on investment than American Century. However, SPDR Kensho is 1.27 times more volatile than American Century Mid. It trades about 0.24 of its potential returns per unit of risk. American Century Mid is currently generating about 0.13 per unit of risk. If you would invest 5,028 in SPDR Kensho New on August 30, 2024 and sell it today you would earn a total of 398.00 from holding SPDR Kensho New or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho New vs. American Century Mid
Performance |
| Timeline |
| SPDR Kensho New |
| American Century Mid |
SPDR Kensho and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and American Century
The main advantage of trading using opposite SPDR Kensho and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho 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.| SPDR Kensho vs. BlackRock Future Health | SPDR Kensho vs. Global X Thematic | SPDR Kensho vs. Aquagold International | SPDR Kensho vs. Morningstar Unconstrained Allocation |
| American Century vs. American Century Sustainable | American Century vs. American Century ETF | American Century vs. Sprott Focus Trust | American Century vs. American Century Quality |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |