Correlation Between American Beacon and Locorr Long/short
Can any of the company-specific risk be diversified away by investing in both American Beacon and Locorr Long/short 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 Locorr Long/short 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 Locorr Longshort Modities, you can compare the effects of market volatilities on American Beacon and Locorr Long/short 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 Locorr Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Locorr Long/short.
Diversification Opportunities for American Beacon and Locorr Long/short
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Locorr is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities 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 Locorr Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of American Beacon i.e., American Beacon and Locorr Long/short go up and down completely randomly.
Pair Corralation between American Beacon and Locorr Long/short
Assuming the 90 days horizon American Beacon Ahl is expected to under-perform the Locorr Long/short. In addition to that, American Beacon is 1.91 times more volatile than Locorr Longshort Modities. It trades about -0.1 of its total potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.07 per unit of volatility. If you would invest 876.00 in Locorr Longshort Modities on November 29, 2024 and sell it today you would lose (5.00) from holding Locorr Longshort Modities or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Ahl vs. Locorr Longshort Modities
Performance |
| Timeline |
| American Beacon Ahl |
| Locorr Longshort Modities |
American Beacon and Locorr Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Locorr Long/short
The main advantage of trading using opposite American Beacon and Locorr Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Locorr Long/short 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 Locorr Long/short will offset losses from the drop in Locorr Long/short's 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 |
| Locorr Long/short vs. Voya Real Estate | Locorr Long/short vs. Deutsche Real Estate | Locorr Long/short vs. Global Real Estate | Locorr Long/short vs. Forum Real Estate |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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