Correlation Between American Beacon and Barings Global
Can any of the company-specific risk be diversified away by investing in both American Beacon and Barings Global 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 Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Small and Barings Global Floating, you can compare the effects of market volatilities on American Beacon and Barings Global 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 Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Barings Global.
Diversification Opportunities for American Beacon and Barings Global
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Barings is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Small are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of American Beacon i.e., American Beacon and Barings Global go up and down completely randomly.
Pair Corralation between American Beacon and Barings Global
Assuming the 90 days horizon American Beacon Small is expected to generate 6.59 times more return on investment than Barings Global. However, American Beacon is 6.59 times more volatile than Barings Global Floating. It trades about 0.03 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.18 per unit of risk. If you would invest 2,175 in American Beacon Small on November 2, 2024 and sell it today you would earn a total of 375.00 from holding American Beacon Small or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Beacon Small vs. Barings Global Floating
Performance |
| Timeline |
| American Beacon Small |
| Barings Global Floating |
American Beacon and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Barings Global
The main advantage of trading using opposite American Beacon and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Barings Global 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 Barings Global will offset losses from the drop in Barings Global's long position.| American Beacon vs. Global Gold Fund | American Beacon vs. World Precious Minerals | American Beacon vs. Deutsche Gold Precious | American Beacon vs. Oppenheimer Gold Special |
| Barings Global vs. Vanguard Growth And | Barings Global vs. Growth Portfolio Class | Barings Global vs. Artisan Small Cap | Barings Global vs. Mid Cap Growth |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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