Correlation Between Ab Value and American Beacon
Can any of the company-specific risk be diversified away by investing in both Ab Value 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 Ab Value and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and American Beacon Shapiro, you can compare the effects of market volatilities on Ab Value 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 Ab Value with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and American Beacon.
Diversification Opportunities for Ab Value and American Beacon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABVCX and American is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro and Ab Value 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 Ab Value Fund 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 Shapiro has no effect on the direction of Ab Value i.e., Ab Value and American Beacon go up and down completely randomly.
Pair Corralation between Ab Value and American Beacon
Assuming the 90 days horizon Ab Value Fund is expected to generate 0.94 times more return on investment than American Beacon. However, Ab Value Fund is 1.06 times less risky than American Beacon. It trades about 0.07 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about 0.0 per unit of risk. If you would invest 1,964 in Ab Value Fund on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Ab Value Fund or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Ab Value Fund vs. American Beacon Shapiro
Performance |
| Timeline |
| Ab Value Fund |
| American Beacon Shapiro |
Ab Value and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and American Beacon
The main advantage of trading using opposite Ab Value and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value 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.| Ab Value vs. Franklin Adjustable Government | Ab Value vs. Us Government Securities | Ab Value vs. Lord Abbett Government | Ab Value vs. Dunham Porategovernment Bond |
| American Beacon vs. Eip Growth And | American Beacon vs. T Rowe Price | American Beacon vs. Praxis Growth Index | American Beacon vs. Qs Moderate 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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