Correlation Between BondBloxx ETF and American Century

Can any of the company-specific risk be diversified away by investing in both BondBloxx 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 BondBloxx 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 BondBloxx ETF Trust and American Century STOXX, you can compare the effects of market volatilities on BondBloxx 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 BondBloxx ETF with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of BondBloxx ETF and American Century.

Diversification Opportunities for BondBloxx ETF and American Century

-0.24

Correlation Coefficient

BondBloxx ETF  American Century

Very good diversification

The 3 months correlation between BondBloxx and American is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BondBloxx ETF Trust and American Century STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century STOXX and BondBloxx 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 BondBloxx 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 STOXX has no effect on the direction of BondBloxx ETF i.e., BondBloxx ETF and American Century go up and down completely randomly.

Pair Corralation between BondBloxx ETF and American Century

Given the investment horizon of 90 days BondBloxx ETF Trust is expected to generate 0.55 times more return on investment than American Century. However, BondBloxx ETF Trust is 1.82 times less risky than American Century. It trades about 0.16 of its potential returns per unit of risk. American Century STOXX is currently generating about 0.06 per unit of risk. If you would invest  5,018  in BondBloxx ETF Trust on September 15, 2024 and sell it today you would earn a total of  53.00  from holding BondBloxx ETF Trust or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

BondBloxx ETF Trust  vs.  American Century STOXX

BondBloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BondBloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

American Century STOXX

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Century STOXX are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, American Century is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BondBloxx ETF and American Century

The main advantage of trading using opposite BondBloxx ETF and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BondBloxx 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.

The idea behind BondBloxx ETF Trust and American Century STOXX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.