Correlation Between American Century and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both American Century and SPDR Barclays 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 SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Diversified and SPDR Barclays Short, you can compare the effects of market volatilities on American Century and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and SPDR Barclays.
Diversification Opportunities for American Century and SPDR Barclays
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and SPDR is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Century Diversified and SPDR Barclays Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Short 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 Diversified are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Short has no effect on the direction of American Century i.e., American Century and SPDR Barclays go up and down completely randomly.
Pair Corralation between American Century and SPDR Barclays
Given the investment horizon of 90 days American Century Diversified is expected to generate 2.66 times more return on investment than SPDR Barclays. However, American Century is 2.66 times more volatile than SPDR Barclays Short. It trades about 0.06 of its potential returns per unit of risk. SPDR Barclays Short is currently generating about 0.16 per unit of risk. If you would invest 4,181 in American Century Diversified on August 27, 2024 and sell it today you would earn a total of 469.00 from holding American Century Diversified or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Century Diversified vs. SPDR Barclays Short
Performance |
| Timeline |
| American Century Div |
| SPDR Barclays Short |
American Century and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and SPDR Barclays
The main advantage of trading using opposite American Century and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.| American Century vs. iShares Edge Investment | American Century vs. American Century STOXX | American Century vs. iShares Inflation Hedged | American Century vs. Franklin Liberty Investment |
| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 Year |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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