Correlation Between American Beacon and Blue Current
Can any of the company-specific risk be diversified away by investing in both American Beacon and Blue Current 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 Blue Current into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ark and Blue Current Global, you can compare the effects of market volatilities on American Beacon and Blue Current 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 Blue Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Blue Current.
Diversification Opportunities for American Beacon and Blue Current
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Blue is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ark and Blue Current Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Current Global 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 Ark are associated (or correlated) with Blue Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Current Global has no effect on the direction of American Beacon i.e., American Beacon and Blue Current go up and down completely randomly.
Pair Corralation between American Beacon and Blue Current
Assuming the 90 days horizon American Beacon Ark is expected to generate 3.24 times more return on investment than Blue Current. However, American Beacon is 3.24 times more volatile than Blue Current Global. It trades about 0.07 of its potential returns per unit of risk. Blue Current Global is currently generating about 0.06 per unit of risk. If you would invest 1,106 in American Beacon Ark on November 28, 2024 and sell it today you would earn a total of 328.00 from holding American Beacon Ark or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
American Beacon Ark vs. Blue Current Global
Performance |
| Timeline |
| American Beacon Ark |
| Blue Current Global |
American Beacon and Blue Current Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Blue Current
The main advantage of trading using opposite American Beacon and Blue Current positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Blue Current 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 Blue Current will offset losses from the drop in Blue Current's long position.| American Beacon vs. Mesirow Financial High | American Beacon vs. Intal High Relative | American Beacon vs. Pace High Yield | American Beacon vs. Alpine High Yield |
| Blue Current vs. Jpmorgan Emerging Markets | Blue Current vs. Investec Emerging Markets | Blue Current vs. Goldman Sachs Emerging | Blue Current vs. Pnc Emerging Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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