Correlation Between Amer Beacon and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Amer Beacon and Amer 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 Amer Beacon and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Beacon Ark and Amer Beacon Ark, you can compare the effects of market volatilities on Amer Beacon and Amer 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 Amer Beacon with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Beacon and Amer Beacon.
Diversification Opportunities for Amer Beacon and Amer Beacon
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Amer and Amer is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Ark and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Amer 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 Amer Beacon Ark are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Amer Beacon i.e., Amer Beacon and Amer Beacon go up and down completely randomly.
Pair Corralation between Amer Beacon and Amer Beacon
Assuming the 90 days horizon Amer Beacon is expected to generate 1.0 times less return on investment than Amer Beacon. But when comparing it to its historical volatility, Amer Beacon Ark is 1.0 times less risky than Amer Beacon. It trades about 0.07 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,096 in Amer Beacon Ark on September 4, 2024 and sell it today you would earn a total of 526.00 from holding Amer Beacon Ark or generate 47.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amer Beacon Ark vs. Amer Beacon Ark
Performance |
| Timeline |
| Amer Beacon Ark |
| Amer Beacon Ark |
Amer Beacon and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Beacon and Amer Beacon
The main advantage of trading using opposite Amer Beacon and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Beacon position performs unexpectedly, Amer 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Amer Beacon vs. Ridgeworth Innovative Growth | Amer Beacon vs. Mid Cap Growth | Amer Beacon vs. Small Pany Growth | Amer Beacon vs. Morgan Stanley Multi |
| Amer Beacon vs. Fuller Thaler Behavioral | Amer Beacon vs. Principal Lifetime Hybrid | Amer Beacon vs. Northern Small Cap | Amer Beacon vs. Tax Managed Mid Small |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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