Correlation Between American Beacon and American Beacon
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon The and American Beacon The, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and American Beacon.
Diversification Opportunities for American Beacon and American Beacon
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon The and American Beacon The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon 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 The 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 has no effect on the direction of American Beacon i.e., American Beacon and American Beacon go up and down completely randomly.
Pair Corralation between American Beacon and American Beacon
Assuming the 90 days horizon American Beacon The is expected to generate 1.0 times more return on investment than American Beacon. However, American Beacon The is 1.0 times less risky than American Beacon. It trades about 0.08 of its potential returns per unit of risk. American Beacon The is currently generating about 0.08 per unit of risk. If you would invest 2,064 in American Beacon The on August 26, 2024 and sell it today you would earn a total of 380.00 from holding American Beacon The or generate 18.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon The vs. American Beacon The
Performance |
| Timeline |
| American Beacon |
| American Beacon |
American Beacon and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and American Beacon
The main advantage of trading using opposite American Beacon and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. California Bond Fund | American Beacon vs. Pace Municipal Fixed | American Beacon vs. Maryland Tax Free Bond | American Beacon vs. Morningstar Defensive Bond |
| American Beacon vs. American Beacon The | American Beacon vs. American Beacon The | American Beacon vs. American Beacon The | American Beacon vs. American Beacon The |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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