Correlation Between Affinity World and American Century
Can any of the company-specific risk be diversified away by investing in both Affinity World 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 Affinity World and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity World Leaders and American Century ETF, you can compare the effects of market volatilities on Affinity World 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 Affinity World with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity World and American Century.
Diversification Opportunities for Affinity World and American Century
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Affinity and American is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Affinity World Leaders 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 Affinity World 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 Affinity World Leaders 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 Affinity World i.e., Affinity World and American Century go up and down completely randomly.
Pair Corralation between Affinity World and American Century
Given the investment horizon of 90 days Affinity World Leaders is expected to generate 1.06 times more return on investment than American Century. However, Affinity World is 1.06 times more volatile than American Century ETF. It trades about 0.11 of its potential returns per unit of risk. American Century ETF is currently generating about 0.08 per unit of risk. If you would invest 3,083 in Affinity World Leaders on September 1, 2024 and sell it today you would earn a total of 411.00 from holding Affinity World Leaders or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity World Leaders vs. American Century ETF
Performance |
| Timeline |
| Affinity World Leaders |
| American Century ETF |
Affinity World and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity World and American Century
The main advantage of trading using opposite Affinity World and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity World 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.| Affinity World vs. FCF International Quality | Affinity World vs. American Century STOXX | Affinity World vs. PIMCO RAFI Dynamic | Affinity World vs. ProShares SP 500 |
| American Century vs. EA Series Trust | American Century vs. Northern Lights | American Century vs. Northern Lights | American Century vs. Northern Lights |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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