Correlation Between Amg River and American Beacon
Can any of the company-specific risk be diversified away by investing in both Amg River 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 Amg River and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and American Beacon Ark, you can compare the effects of market volatilities on Amg River 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 Amg River with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and American Beacon.
Diversification Opportunities for Amg River and American Beacon
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and American Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ark and Amg River 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 Amg River Road 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 Ark has no effect on the direction of Amg River i.e., Amg River and American Beacon go up and down completely randomly.
Pair Corralation between Amg River and American Beacon
Assuming the 90 days horizon Amg River is expected to generate 2.95 times less return on investment than American Beacon. But when comparing it to its historical volatility, Amg River Road is 2.39 times less risky than American Beacon. It trades about 0.06 of its potential returns per unit of risk. American Beacon Ark is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 797.00 in American Beacon Ark on September 14, 2024 and sell it today you would earn a total of 831.00 from holding American Beacon Ark or generate 104.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. American Beacon Ark
Performance |
| Timeline |
| Amg River Road |
| American Beacon Ark |
Amg River and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and American Beacon
The main advantage of trading using opposite Amg River and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River 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.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
| American Beacon vs. Heartland Value Plus | American Beacon vs. Valic Company I | American Beacon vs. Amg River Road | American Beacon vs. Victory Rs Partners |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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