Correlation Between American Beacon and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both American Beacon and Guggenheim Managed 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 Guggenheim Managed 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 Guggenheim Managed Futures, you can compare the effects of market volatilities on American Beacon and Guggenheim Managed 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 Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Guggenheim Managed.
Diversification Opportunities for American Beacon and Guggenheim Managed
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Guggenheim is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim 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 Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of American Beacon i.e., American Beacon and Guggenheim Managed go up and down completely randomly.
Pair Corralation between American Beacon and Guggenheim Managed
Assuming the 90 days horizon American Beacon Ahl is expected to under-perform the Guggenheim Managed. In addition to that, American Beacon is 1.21 times more volatile than Guggenheim Managed Futures. It trades about -0.06 of its total potential returns per unit of risk. Guggenheim Managed Futures is currently generating about -0.03 per unit of volatility. If you would invest 2,072 in Guggenheim Managed Futures on August 28, 2024 and sell it today you would lose (7.00) from holding Guggenheim Managed Futures or give up 0.34% 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. Guggenheim Managed Futures
Performance |
| Timeline |
| American Beacon Ahl |
| Guggenheim Managed |
American Beacon and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Guggenheim Managed
The main advantage of trading using opposite American Beacon and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Guggenheim Managed 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed's 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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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