Correlation Between MegaLong Canadian and American Century
Can any of the company-specific risk be diversified away by investing in both MegaLong Canadian 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 MegaLong Canadian and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MegaLong Canadian Banks and American Century ETF, you can compare the effects of market volatilities on MegaLong Canadian 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 MegaLong Canadian with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of MegaLong Canadian and American Century.
Diversification Opportunities for MegaLong Canadian and American Century
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MegaLong and American is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding MegaLong Canadian Banks and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF and MegaLong Canadian 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 MegaLong Canadian Banks 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 ETF has no effect on the direction of MegaLong Canadian i.e., MegaLong Canadian and American Century go up and down completely randomly.
Pair Corralation between MegaLong Canadian and American Century
Assuming the 90 days trading horizon MegaLong Canadian Banks is expected to generate 2.69 times more return on investment than American Century. However, MegaLong Canadian is 2.69 times more volatile than American Century ETF. It trades about 0.32 of its potential returns per unit of risk. American Century ETF is currently generating about 0.09 per unit of risk. If you would invest 2,432 in MegaLong Canadian Banks on August 18, 2025 and sell it today you would earn a total of 1,208 from holding MegaLong Canadian Banks or generate 49.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
MegaLong Canadian Banks vs. American Century ETF
Performance |
| Timeline |
| MegaLong Canadian Banks |
| American Century ETF |
MegaLong Canadian and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MegaLong Canadian and American Century
The main advantage of trading using opposite MegaLong Canadian and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MegaLong Canadian 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.| MegaLong Canadian vs. MegaLong Semiconductors Daily | MegaLong Canadian vs. MegaLong 20 Year | MegaLong Canadian vs. MegaLong Canadian Gold | MegaLong Canadian vs. MegaLong SP 500 |
| American Century vs. Tema ETF Trust | American Century vs. iShares Morningstar Small Cap | American Century vs. Innovator SP 500 | American Century vs. Innovator SP 500 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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