Correlation Between Blackrock Mid and American Beacon
Can any of the company-specific risk be diversified away by investing in both Blackrock Mid 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 Blackrock Mid and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Mid Cap and American Beacon Sga, you can compare the effects of market volatilities on Blackrock Mid 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 Blackrock Mid with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Mid and American Beacon.
Diversification Opportunities for Blackrock Mid and American Beacon
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and American is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Mid Cap and American Beacon Sga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Sga and Blackrock Mid 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 Blackrock Mid Cap 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 Sga has no effect on the direction of Blackrock Mid i.e., Blackrock Mid and American Beacon go up and down completely randomly.
Pair Corralation between Blackrock Mid and American Beacon
Assuming the 90 days horizon Blackrock Mid Cap is expected to generate 1.72 times more return on investment than American Beacon. However, Blackrock Mid is 1.72 times more volatile than American Beacon Sga. It trades about 0.16 of its potential returns per unit of risk. American Beacon Sga is currently generating about 0.09 per unit of risk. If you would invest 3,601 in Blackrock Mid Cap on September 15, 2024 and sell it today you would earn a total of 158.00 from holding Blackrock Mid Cap or generate 4.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Blackrock Mid Cap vs. American Beacon Sga
Performance |
Timeline |
Blackrock Mid Cap |
American Beacon Sga |
Blackrock Mid and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blackrock Mid and American Beacon
The main advantage of trading using opposite Blackrock Mid and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Mid 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.Blackrock Mid vs. Blackrock Mid Cap | Blackrock Mid vs. Blackrock Mid Cap | Blackrock Mid vs. Blackrock Health Sciences | Blackrock Mid vs. Blackrock Science Technology |
American Beacon vs. Sands Capital Global | American Beacon vs. American Beacon Sga | American Beacon vs. Amg Timessquare International | American Beacon vs. Aquagold International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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