Correlation Between American Beacon and Delaware Value
Can any of the company-specific risk be diversified away by investing in both American Beacon and Delaware Value 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 Delaware Value 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 Delaware Value Fund, you can compare the effects of market volatilities on American Beacon and Delaware Value 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 Delaware Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Delaware Value.
Diversification Opportunities for American Beacon and Delaware Value
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Delaware is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon International and Delaware Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Value 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 Delaware Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Value has no effect on the direction of American Beacon i.e., American Beacon and Delaware Value go up and down completely randomly.
Pair Corralation between American Beacon and Delaware Value
Assuming the 90 days horizon American Beacon is expected to generate 2.17 times less return on investment than Delaware Value. In addition to that, American Beacon is 1.23 times more volatile than Delaware Value Fund. It trades about 0.04 of its total potential returns per unit of risk. Delaware Value Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,603 in Delaware Value Fund on August 29, 2024 and sell it today you would earn a total of 313.00 from holding Delaware Value Fund or generate 19.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon International vs. Delaware Value Fund
Performance |
| Timeline |
| American Beacon Inte |
| Delaware Value |
American Beacon and Delaware Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Delaware Value
The main advantage of trading using opposite American Beacon and Delaware Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Delaware Value 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 Delaware Value will offset losses from the drop in Delaware Value's long position.| American Beacon vs. Pace High Yield | American Beacon vs. Morningstar Aggressive Growth | American Beacon vs. Vanguard High Yield Tax Exempt | American Beacon vs. Strategic Allocation Aggressive |
| Delaware Value vs. Blackrock Sm Cap | Delaware Value vs. Adams Diversified Equity | Delaware Value vs. Tax Managed Mid Small | Delaware Value vs. Sentinel Small Pany |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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