Correlation Between American Beacon and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both American Beacon and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ahl and Goldman Sachs Managed, you can compare the effects of market volatilities on American Beacon and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Goldman Sachs.
Diversification Opportunities for American Beacon and Goldman Sachs
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and GOLDMAN is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl and Goldman Sachs Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Managed 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 Ahl are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Managed has no effect on the direction of American Beacon i.e., American Beacon and Goldman Sachs go up and down completely randomly.
Pair Corralation between American Beacon and Goldman Sachs
Assuming the 90 days horizon American Beacon Ahl is expected to generate 0.8 times more return on investment than Goldman Sachs. However, American Beacon Ahl is 1.24 times less risky than Goldman Sachs. It trades about 0.0 of its potential returns per unit of risk. Goldman Sachs Managed is currently generating about -0.04 per unit of risk. If you would invest 973.00 in American Beacon Ahl on September 3, 2024 and sell it today you would lose (2.00) from holding American Beacon Ahl or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Ahl vs. Goldman Sachs Managed
Performance |
| Timeline |
| American Beacon Ahl |
| Goldman Sachs Managed |
American Beacon and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Goldman Sachs
The main advantage of trading using opposite American Beacon and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| American Beacon vs. Asg Managed Futures | American Beacon vs. Pimco Trends Managed | American Beacon vs. American Beacon Ahl | American Beacon vs. Aqr Managed Futures |
| Goldman Sachs vs. Aqr Managed Futures | Goldman Sachs vs. Pimco Trends Managed | Goldman Sachs vs. Pimco Trends Managed | Goldman Sachs vs. American Beacon Ahl |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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