Correlation Between Global Gold and American Beacon
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and American Beacon Twentyfour, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and American Beacon.
Diversification Opportunities for Global Gold and American Beacon
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and American is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen and Global Gold 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 Global Gold 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 Twen has no effect on the direction of Global Gold i.e., Global Gold and American Beacon go up and down completely randomly.
Pair Corralation between Global Gold and American Beacon
Assuming the 90 days horizon Global Gold Fund is expected to generate 14.96 times more return on investment than American Beacon. However, Global Gold is 14.96 times more volatile than American Beacon Twentyfour. It trades about 0.52 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.42 per unit of risk. If you would invest 1,193 in Global Gold Fund on November 5, 2024 and sell it today you would earn a total of 156.00 from holding Global Gold Fund or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. American Beacon Twentyfour
Performance |
| Timeline |
| Global Gold Fund |
| American Beacon Twen |
Global Gold and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and American Beacon
The main advantage of trading using opposite Global Gold and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. Goldman Sachs Clean | Global Gold vs. Gabelli Gold Fund | Global Gold vs. Goldman Sachs Mid | Global Gold vs. Precious Metals And |
| American Beacon vs. Qs Global Equity | American Beacon vs. Ab Global Bond | American Beacon vs. Morningstar Global Income | American Beacon vs. T Rowe Price |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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