Correlation Between American Century and Eastern

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

Diversification Opportunities for American Century and Eastern

0.65

Correlation Coefficient

American Century  Eastern

Poor diversification

The 3 months correlation between American and Eastern is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Century Mid and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of American Century i.e., American Century and Eastern go up and down completely randomly.

Pair Corralation between American Century and Eastern

Considering the 90-day investment horizon American Century Mid is expected to generate 0.47 times more return on investment than Eastern. However, American Century Mid is 2.14 times less risky than Eastern. It trades about 0.21 of its potential returns per unit of risk. Eastern Co is currently generating about -0.03 per unit of risk. If you would invest  5,936  in American Century Mid on May 7, 2025 and sell it today you would earn a total of  748.00  from holding American Century Mid or generate 12.6% return on investment over 90 days.

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

American Century Mid  vs.  Eastern Co

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 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, American Century may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Eastern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Eastern is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with American Century and Eastern

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

The idea behind American Century Mid and Eastern Co 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 CEOs Directory module to screen CEOs from public companies around the world.