Correlation Between Mast Global and American Century

Can any of the company-specific risk be diversified away by investing in both Mast Global 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 Mast Global and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mast Global Battery and American Century Quality, you can compare the effects of market volatilities on Mast Global 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 Mast Global with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and American Century.

Diversification Opportunities for Mast Global and American Century

-0.15

Correlation Coefficient

Mast Global  American Century

Good diversification

The 3 months correlation between Mast and American is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and American Century Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Quality and Mast Global 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 Mast Global Battery 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 Quality has no effect on the direction of Mast Global i.e., Mast Global and American Century go up and down completely randomly.

Pair Corralation between Mast Global and American Century

Allowing for the 90-day total investment horizon Mast Global Battery is expected to under-perform the American Century. In addition to that, Mast Global is 1.02 times more volatile than American Century Quality. It trades about -0.03 of its total potential returns per unit of risk. American Century Quality is currently generating about 0.08 per unit of volatility. If you would invest  10,166  in American Century Quality on October 23, 2024 and sell it today you would earn a total of  134.00  from holding American Century Quality or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mast Global Battery  vs.  American Century Quality

Mast Global Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mast Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

American Century Quality

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Century Quality are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, American Century may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mast Global and American Century

The main advantage of trading using opposite Mast Global and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mast Global 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 Mast Global Battery and American Century Quality 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.