Correlation Between Gulf Investment and American Century

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

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

Diversification Opportunities for Gulf Investment and American Century

0.0

Correlation Coefficient

Gulf Investment  American Century

Pay attention - limited upside

The 3 months correlation between Gulf and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Investment and American Century Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Mid and Gulf Investment 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 Gulf Investment 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 Mid has no effect on the direction of Gulf Investment i.e., Gulf Investment and American Century go up and down completely randomly.

Pair Corralation between Gulf Investment and American Century

If you would invest  5,893  in American Century Mid on May 6, 2025 and sell it today you would earn a total of  791.00  from holding American Century Mid or generate 13.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Gulf Investment  vs.  American Century Mid

Gulf Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gulf Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Gulf Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

American Century Mid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Century Mid are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, American Century exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gulf Investment and American Century

The main advantage of trading using opposite Gulf Investment and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Investment 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 Gulf Investment and American Century Mid 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.