Correlation Between DBX ETF and American Century
Can any of the company-specific risk be diversified away by investing in both DBX ETF 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 DBX ETF and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and American Century Quality, you can compare the effects of market volatilities on DBX ETF 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 DBX ETF with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and American Century.
Diversification Opportunities for DBX ETF and American Century
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DBX and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and American Century Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Quality and DBX ETF 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 DBX ETF Trust 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 Quality has no effect on the direction of DBX ETF i.e., DBX ETF and American Century go up and down completely randomly.
Pair Corralation between DBX ETF and American Century
Given the investment horizon of 90 days DBX ETF is expected to generate 1.47 times less return on investment than American Century. But when comparing it to its historical volatility, DBX ETF Trust is 1.3 times less risky than American Century. It trades about 0.11 of its potential returns per unit of risk. American Century Quality is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,723 in American Century Quality on September 16, 2024 and sell it today you would earn a total of 4,649 from holding American Century Quality or generate 81.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBX ETF Trust vs. American Century Quality
Performance |
| Timeline |
| DBX ETF Trust |
| American Century Quality |
DBX ETF and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and American Century
The main advantage of trading using opposite DBX ETF and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF 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.| DBX ETF vs. Vanguard SP 500 | DBX ETF vs. Vanguard Real Estate | DBX ETF vs. Vanguard Total Bond | DBX ETF vs. Vanguard High Dividend |
| American Century vs. iShares Factors Growth | American Century vs. Absolute Core Strategy | American Century vs. iShares ESG Advanced | American Century vs. PIMCO RAFI Dynamic |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |