Correlation Between American Century and Global X
Can any of the company-specific risk be diversified away by investing in both American Century and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century STOXX and Global X Funds, you can compare the effects of market volatilities on American Century and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Global X.
Diversification Opportunities for American Century and Global X
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Global is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding American Century STOXX and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 STOXX are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of American Century i.e., American Century and Global X go up and down completely randomly.
Pair Corralation between American Century and Global X
Given the investment horizon of 90 days American Century is expected to generate 2.78 times less return on investment than Global X. But when comparing it to its historical volatility, American Century STOXX is 1.27 times less risky than Global X. It trades about 0.0 of its potential returns per unit of risk. Global X Funds is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,704 in Global X Funds on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Global X Funds or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Century STOXX vs. Global X Funds
Performance |
| Timeline |
| American Century STOXX |
| Global X Funds |
American Century and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Global X
The main advantage of trading using opposite American Century and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| American Century vs. American Century Quality | American Century vs. Invesco SP 500 | American Century vs. American Century Diversified | American Century vs. Invesco SP SmallCap |
| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. iShares Emerging Markets | Global X vs. Global X SuperDividend |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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