Correlation Between American Beacon and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both American Beacon and Pimco Trends 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 Pimco Trends 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 Pimco Trends Managed, you can compare the effects of market volatilities on American Beacon and Pimco Trends 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 Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Pimco Trends.
Diversification Opportunities for American Beacon and Pimco Trends
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Pimco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends 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 Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of American Beacon i.e., American Beacon and Pimco Trends go up and down completely randomly.
Pair Corralation between American Beacon and Pimco Trends
Assuming the 90 days horizon American Beacon Ahl is expected to generate 1.05 times more return on investment than Pimco Trends. However, American Beacon is 1.05 times more volatile than Pimco Trends Managed. It trades about 0.0 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.04 per unit of risk. If you would invest 994.00 in American Beacon Ahl on August 27, 2024 and sell it today you would lose (9.00) from holding American Beacon Ahl or give up 0.91% 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. Pimco Trends Managed
Performance |
| Timeline |
| American Beacon Ahl |
| Pimco Trends Managed |
American Beacon and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Pimco Trends
The main advantage of trading using opposite American Beacon and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Pimco Trends 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 Pimco Trends will offset losses from the drop in Pimco Trends' long position.| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
| Pimco Trends vs. Fidelity Sai International | Pimco Trends vs. Fidelity Sai Minimum | Pimco Trends vs. Fidelity Sai Treasury | Pimco Trends vs. Fidelity Sai Emerging |
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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