Correlation Between American Century and Growth Fund
Can any of the company-specific risk be diversified away by investing in both American Century and Growth Fund 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 Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Ultra and Growth Fund Investor, you can compare the effects of market volatilities on American Century and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Growth Fund.
Diversification Opportunities for American Century and Growth Fund
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Growth is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Century Ultra and Growth Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Investor 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 Ultra are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund Investor has no effect on the direction of American Century i.e., American Century and Growth Fund go up and down completely randomly.
Pair Corralation between American Century and Growth Fund
Assuming the 90 days horizon American Century Ultra is expected to generate 1.05 times more return on investment than Growth Fund. However, American Century is 1.05 times more volatile than Growth Fund Investor. It trades about 0.09 of its potential returns per unit of risk. Growth Fund Investor is currently generating about 0.09 per unit of risk. If you would invest 7,853 in American Century Ultra on September 11, 2024 and sell it today you would earn a total of 3,226 from holding American Century Ultra or generate 41.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
American Century Ultra vs. Growth Fund Investor
Performance |
Timeline |
American Century Ultra |
Growth Fund Investor |
American Century and Growth Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Century and Growth Fund
The main advantage of trading using opposite American Century and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.American Century vs. Qs Large Cap | American Century vs. Falcon Focus Scv | American Century vs. Scharf Global Opportunity | American Century vs. Aam Select Income |
Growth Fund vs. Select Fund Investor | Growth Fund vs. Ultra Fund Investor | Growth Fund vs. Heritage Fund Investor | Growth Fund vs. International Growth Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |