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 Twentyfour, 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
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amg and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 Twen 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 Road is expected to generate 13.33 times more return on investment than American Beacon. However, Amg River is 13.33 times more volatile than American Beacon Twentyfour. It trades about 0.37 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.18 per unit of risk. If you would invest 1,017 in Amg River Road on August 31, 2024 and sell it today you would earn a total of 104.00 from holding Amg River Road or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. American Beacon Twentyfour
Performance |
| Timeline |
| Amg River Road |
| American Beacon Twen |
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. Amg River Road | American Beacon vs. Hennessy Nerstone Mid | American Beacon vs. Ultramid Cap Profund Ultramid Cap | American Beacon vs. Columbia Small Cap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |