Correlation Between American Century and Aquagold International

Can any of the company-specific risk be diversified away by investing in both American Century and Aquagold International 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 Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on American Century and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Aquagold International.

Diversification Opportunities for American Century and Aquagold International

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Correlation Coefficient

American Century  Aquagold International

Pay attention - limited upside

The 3 months correlation between American and Aquagold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Century STOXX and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of American Century i.e., American Century and Aquagold International go up and down completely randomly.

Pair Corralation between American Century and Aquagold International

Given the investment horizon of 90 days American Century is expected to generate 48.73 times less return on investment than Aquagold International. But when comparing it to its historical volatility, American Century STOXX is 68.86 times less risky than Aquagold International. It trades about 0.08 of its potential returns per unit of risk. Aquagold International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Aquagold International on September 20, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

American Century STOXX  vs.  Aquagold International

American Century STOXX

Risk-Adjusted Performance

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Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Century STOXX are ranked lower than 1 (%) 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.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with American Century and Aquagold International

The main advantage of trading using opposite American Century and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.

The idea behind American Century STOXX and Aquagold International 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.