Correlation Between American Beacon and Buffalo Flexible
Can any of the company-specific risk be diversified away by investing in both American Beacon and Buffalo Flexible 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 Buffalo Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Large and Buffalo Flexible Income, you can compare the effects of market volatilities on American Beacon and Buffalo Flexible 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 Buffalo Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Buffalo Flexible.
Diversification Opportunities for American Beacon and Buffalo Flexible
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Buffalo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Large and Buffalo Flexible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Flexible Income 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 Large are associated (or correlated) with Buffalo Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Flexible Income has no effect on the direction of American Beacon i.e., American Beacon and Buffalo Flexible go up and down completely randomly.
Pair Corralation between American Beacon and Buffalo Flexible
Assuming the 90 days horizon American Beacon Large is expected to generate 1.34 times more return on investment than Buffalo Flexible. However, American Beacon is 1.34 times more volatile than Buffalo Flexible Income. It trades about 0.13 of its potential returns per unit of risk. Buffalo Flexible Income is currently generating about 0.1 per unit of risk. If you would invest 2,432 in American Beacon Large on September 1, 2024 and sell it today you would earn a total of 309.00 from holding American Beacon Large or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Large vs. Buffalo Flexible Income
Performance |
| Timeline |
| American Beacon Large |
| Buffalo Flexible Income |
American Beacon and Buffalo Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Buffalo Flexible
The main advantage of trading using opposite American Beacon and Buffalo Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Buffalo Flexible 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 Buffalo Flexible will offset losses from the drop in Buffalo Flexible's long position.| American Beacon vs. Northern Small Cap | American Beacon vs. Ssga International Stock | American Beacon vs. American Beacon International | American Beacon vs. Perkins Mid Cap |
| Buffalo Flexible vs. Villere Balanced Fund | Buffalo Flexible vs. Buffalo High Yield | Buffalo Flexible vs. Buffalo Growth Fund | Buffalo Flexible vs. James Balanced Golden |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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