Correlation Between First Trust and American Century
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Horizon and American Century ETF, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and American Century.
Diversification Opportunities for First Trust and American Century
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and American is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Horizon 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 First Trust 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 First Trust Horizon 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 First Trust i.e., First Trust and American Century go up and down completely randomly.
Pair Corralation between First Trust and American Century
Given the investment horizon of 90 days First Trust is expected to generate 171.25 times less return on investment than American Century. But when comparing it to its historical volatility, First Trust Horizon is 1.38 times less risky than American Century. It trades about 0.0 of its potential returns per unit of risk. American Century ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,958 in American Century ETF on August 29, 2025 and sell it today you would earn a total of 295.00 from holding American Century ETF or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Horizon vs. American Century ETF
Performance |
| Timeline |
| First Trust Horizon |
| American Century ETF |
First Trust and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and American Century
The main advantage of trading using opposite First Trust and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. Vanguard Minimum Volatility | First Trust vs. Invesco SP Emerging | First Trust vs. iShares MSCI Emerging | First Trust vs. iShares MSCI EAFE |
| American Century vs. Series Portfolios Trust | American Century vs. First Trust Multi Asset | American Century vs. Collaborative Investment Series | American Century vs. Northern Lights |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |