Correlation Between American Beacon and American Beacon
Can any of the company-specific risk be diversified away by investing in both American Beacon and American Beacon 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 Beacon and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon International and American Beacon Large, you can compare the effects of market volatilities on American Beacon and American Beacon 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 Beacon with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and American Beacon.
Diversification Opportunities for American Beacon and American Beacon
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and American is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon International and American Beacon Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Large and American Beacon 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 Beacon International are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Large has no effect on the direction of American Beacon i.e., American Beacon and American Beacon go up and down completely randomly.
Pair Corralation between American Beacon and American Beacon
Assuming the 90 days horizon American Beacon is expected to generate 2.53 times less return on investment than American Beacon. In addition to that, American Beacon is 1.12 times more volatile than American Beacon Large. It trades about 0.04 of its total potential returns per unit of risk. American Beacon Large is currently generating about 0.11 per unit of volatility. If you would invest 2,061 in American Beacon Large on September 7, 2024 and sell it today you would earn a total of 651.00 from holding American Beacon Large or generate 31.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.73% |
Values | Daily Returns |
American Beacon International vs. American Beacon Large
Performance |
Timeline |
American Beacon Inte |
American Beacon Large |
American Beacon and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and American Beacon
The main advantage of trading using opposite American Beacon and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.American Beacon vs. Rational Strategic Allocation | American Beacon vs. Volumetric Fund Volumetric | American Beacon vs. T Rowe Price | American Beacon vs. Artisan Thematic Fund |
American Beacon vs. Value Fund Investor | American Beacon vs. Heritage Fund Investor | American Beacon vs. Equity Growth Fund | American Beacon vs. Income Growth Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Stocks Directory Find actively traded stocks across global markets | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |