Correlation Between American Century and SSgA

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

Diversification Opportunities for American Century and SSgA

0.0

Correlation Coefficient

American Century  SSgA

Pay attention - limited upside

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

Pair Corralation between American Century and SSgA

If you would invest  6,243  in American Century STOXX on September 17, 2024 and sell it today you would earn a total of  88.00  from holding American Century STOXX or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

American Century STOXX  vs.  SSgA

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.

SSgA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSgA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SSgA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with American Century and SSgA

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

The idea behind American Century STOXX and SSgA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..