Correlation Between American Century and BondBloxx ETF

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

Diversification Opportunities for American Century and BondBloxx ETF

0.19

Correlation Coefficient

American Century  BondBloxx ETF

Average diversification

The 3 months correlation between American and BondBloxx is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding American Century STOXX and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust 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 BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of American Century i.e., American Century and BondBloxx ETF go up and down completely randomly.

Pair Corralation between American Century and BondBloxx ETF

Given the investment horizon of 90 days American Century STOXX is expected to under-perform the BondBloxx ETF. In addition to that, American Century is 2.57 times more volatile than BondBloxx ETF Trust. It trades about -0.02 of its total potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.13 per unit of volatility. If you would invest  4,965  in BondBloxx ETF Trust on December 24, 2024 and sell it today you would earn a total of  119.00  from holding BondBloxx ETF Trust or generate 2.4% return on investment over 90 days.

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

American Century STOXX  vs.  BondBloxx ETF Trust

American Century STOXX

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Century STOXX has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

BondBloxx ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with American Century and BondBloxx ETF

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

The idea behind American Century STOXX and BondBloxx ETF Trust 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 Transaction History module to view history of all your transactions and understand their impact on performance.