Correlation Between American Beacon and Baron Global
Can any of the company-specific risk be diversified away by investing in both American Beacon and Baron Global 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 Baron Global 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 Baron Global Advantage, you can compare the effects of market volatilities on American Beacon and Baron Global 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 Baron Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Baron Global.
Diversification Opportunities for American Beacon and Baron Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Baron is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ark and Baron Global Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Global Advantage 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 Baron Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Global Advantage has no effect on the direction of American Beacon i.e., American Beacon and Baron Global go up and down completely randomly.
Pair Corralation between American Beacon and Baron Global
Assuming the 90 days horizon American Beacon Ark is expected to generate 1.63 times more return on investment than Baron Global. However, American Beacon is 1.63 times more volatile than Baron Global Advantage. It trades about 0.04 of its potential returns per unit of risk. Baron Global Advantage is currently generating about 0.06 per unit of risk. If you would invest 1,073 in American Beacon Ark on August 26, 2024 and sell it today you would earn a total of 470.00 from holding American Beacon Ark or generate 43.8% 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 Ark vs. Baron Global Advantage
Performance |
| Timeline |
| American Beacon Ark |
| Baron Global Advantage |
American Beacon and Baron Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Baron Global
The main advantage of trading using opposite American Beacon and Baron Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Baron Global 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 Baron Global will offset losses from the drop in Baron Global's long position.| American Beacon vs. Ridgeworth Innovative Growth | American Beacon vs. Mid Cap Growth | American Beacon vs. Small Pany Growth | American Beacon vs. Morgan Stanley Multi |
| Baron Global vs. Baron Opportunity Fund | Baron Global vs. Morgan Stanley Multi | Baron Global vs. Mid Cap Growth | Baron Global vs. Baron Fifth Avenue |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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