Correlation Between General Electric and American Century

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both General Electric 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 General Electric and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Electric and American Century One, you can compare the effects of market volatilities on General Electric 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 General Electric with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Electric and American Century.

Diversification Opportunities for General Electric and American Century

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between General and American is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding General Electric and American Century One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century One and General Electric 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 General Electric 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 One has no effect on the direction of General Electric i.e., General Electric and American Century go up and down completely randomly.

Pair Corralation between General Electric and American Century

Allowing for the 90-day total investment horizon General Electric is expected to generate 2.97 times less return on investment than American Century. In addition to that, General Electric is 1.74 times more volatile than American Century One. It trades about 0.04 of its total potential returns per unit of risk. American Century One is currently generating about 0.23 per unit of volatility. If you would invest  885.00  in American Century One on September 9, 2022 and sell it today you would earn a total of  37.00  from holding American Century One or generate 4.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

General Electric  vs.  American Century One

 Performance (%) 
       Timeline  
General Electric 
General Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish technical and fundamental indicators, General Electric exhibited solid returns over the last few months and may actually be approaching a breakup point.

General Price Channel

American Century One 
American Performance
0 of 100
Over the last 90 days American Century One has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, American Century is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Price Channel

General Electric and American Century Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Electric and American Century

The main advantage of trading using opposite General Electric and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Electric 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.
General Electric vs. International Business Machines
General Electric vs. Coca-Cola Co
General Electric vs. Merck Company
General Electric vs. Procter Gamble
The idea behind General Electric and American Century One 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.
American Century vs. American Century One
American Century vs. American Century One
American Century vs. FIDELITY FLEX FREEDOM
American Century vs. FIDELITY FLEX FREEDOM
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go