Correlation Between American Century and ACLC

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

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

Diversification Opportunities for American Century and ACLC

0.96

Correlation Coefficient

American Century  ACLC

Almost no diversification

The 3 months correlation between American and ACLC is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Century Mid and ACLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACLC 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 Mid are associated (or correlated) with ACLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACLC has no effect on the direction of American Century i.e., American Century and ACLC go up and down completely randomly.

Pair Corralation between American Century and ACLC

Considering the 90-day investment horizon American Century Mid is expected to generate 1.2 times more return on investment than ACLC. However, American Century is 1.2 times more volatile than ACLC. It trades about 0.22 of its potential returns per unit of risk. ACLC is currently generating about 0.24 per unit of risk. 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	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

American Century Mid  vs.  ACLC

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.

ACLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, ACLC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with American Century and ACLC

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

The idea behind American Century Mid and ACLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.