Correlation Between VanEck Inflation and American Century
Can any of the company-specific risk be diversified away by investing in both VanEck Inflation 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 VanEck Inflation and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Inflation Allocation and American Century ETF, you can compare the effects of market volatilities on VanEck Inflation 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 VanEck Inflation with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Inflation and American Century.
Diversification Opportunities for VanEck Inflation and American Century
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Inflation Allocation 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 VanEck Inflation 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 VanEck Inflation Allocation 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 VanEck Inflation i.e., VanEck Inflation and American Century go up and down completely randomly.
Pair Corralation between VanEck Inflation and American Century
Given the investment horizon of 90 days VanEck Inflation is expected to generate 1.33 times less return on investment than American Century. In addition to that, VanEck Inflation is 1.32 times more volatile than American Century ETF. It trades about 0.13 of its total potential returns per unit of risk. American Century ETF is currently generating about 0.23 per unit of volatility. If you would invest 5,922 in American Century ETF on August 30, 2024 and sell it today you would earn a total of 158.00 from holding American Century ETF or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Inflation Allocation vs. American Century ETF
Performance |
| Timeline |
| VanEck Inflation All |
| American Century ETF |
VanEck Inflation and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Inflation and American Century
The main advantage of trading using opposite VanEck Inflation and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Inflation 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.| VanEck Inflation vs. EA Series Trust | VanEck Inflation vs. ProShares VIX Mid Term | VanEck Inflation vs. ProShares VIX Short Term | VanEck Inflation vs. LHA Market State |
| American Century vs. iShares Core Growth | American Century vs. Alpha Architect Gdsdn | American Century vs. STF Tactical Growth | American Century vs. VanEck Inflation Allocation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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