Correlation Between American Beacon and Amg Timessquare

Can any of the company-specific risk be diversified away by investing in both American Beacon and Amg Timessquare 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 Amg Timessquare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Beacon Sga and Amg Timessquare International, you can compare the effects of market volatilities on American Beacon and Amg Timessquare 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 Amg Timessquare. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Amg Timessquare.

Diversification Opportunities for American Beacon and Amg Timessquare

-0.25

Correlation Coefficient

American Beacon  Amg Timessquare

Very good diversification

The 3 months correlation between American and Amg is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Sga and Amg Timessquare International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Timessquare Inte 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 Sga are associated (or correlated) with Amg Timessquare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Timessquare Inte has no effect on the direction of American Beacon i.e., American Beacon and Amg Timessquare go up and down completely randomly.

Pair Corralation between American Beacon and Amg Timessquare

Assuming the 90 days horizon American Beacon Sga is expected to generate 0.93 times more return on investment than Amg Timessquare. However, American Beacon Sga is 1.07 times less risky than Amg Timessquare. It trades about 0.09 of its potential returns per unit of risk. Amg Timessquare International is currently generating about -0.13 per unit of risk. If you would invest  2,632  in American Beacon Sga on September 14, 2024 and sell it today you would earn a total of  109.00  from holding American Beacon Sga or generate 4.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American Beacon Sga  vs.  Amg Timessquare International

American Beacon Sga

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Beacon Sga are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, American Beacon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Timessquare Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Timessquare International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with American Beacon and Amg Timessquare

The main advantage of trading using opposite American Beacon and Amg Timessquare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Amg Timessquare 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 Amg Timessquare will offset losses from the drop in Amg Timessquare's long position.

The idea behind American Beacon Sga and Amg Timessquare International 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.