Correlation Between AMERICAN BEACON and BZDYF
Can any of the company-specific risk be diversified away by investing in both AMERICAN BEACON and BZDYF 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 BZDYF 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 BZDYF, you can compare the effects of market volatilities on AMERICAN BEACON and BZDYF 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 BZDYF. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN BEACON and BZDYF.
Diversification Opportunities for AMERICAN BEACON and BZDYF
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMERICAN and BZDYF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN BEACON INTERNATIONAL and BZDYF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BZDYF 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 BZDYF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BZDYF has no effect on the direction of AMERICAN BEACON i.e., AMERICAN BEACON and BZDYF go up and down completely randomly.
Pair Corralation between AMERICAN BEACON and BZDYF
Assuming the 90 days horizon AMERICAN BEACON is expected to generate 3.24 times less return on investment than BZDYF. But when comparing it to its historical volatility, AMERICAN BEACON INTERNATIONAL is 6.93 times less risky than BZDYF. It trades about 0.17 of its potential returns per unit of risk. BZDYF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,695 in BZDYF on September 12, 2024 and sell it today you would earn a total of 542.00 from holding BZDYF or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.75% |
| Values | Daily Returns |
AMERICAN BEACON INTERNATIONAL vs. BZDYF
Performance |
| Timeline |
| AMERICAN BEACON INTE |
| BZDYF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AMERICAN BEACON and BZDYF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN BEACON and BZDYF
The main advantage of trading using opposite AMERICAN BEACON and BZDYF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN BEACON position performs unexpectedly, BZDYF 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 BZDYF will offset losses from the drop in BZDYF's long position.| AMERICAN BEACON vs. Vanguard Total Stock | AMERICAN BEACON vs. SPDR SP 500 | AMERICAN BEACON vs. iShares Core SP | AMERICAN BEACON vs. Vanguard Total Bond |
| BZDYF vs. FT Vest Equity | BZDYF vs. Zillow Group Class | BZDYF vs. Northern Lights | BZDYF vs. VanEck Vectors Moodys |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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