Correlation Between American Beacon and Keeley Small
Can any of the company-specific risk be diversified away by investing in both American Beacon and Keeley Small 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 Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Small and Keeley Small Cap, you can compare the effects of market volatilities on American Beacon and Keeley Small 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 Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Keeley Small.
Diversification Opportunities for American Beacon and Keeley Small
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Keeley is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Keeley Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley Small Cap 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 Small are associated (or correlated) with Keeley Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeley Small Cap has no effect on the direction of American Beacon i.e., American Beacon and Keeley Small go up and down completely randomly.
Pair Corralation between American Beacon and Keeley Small
Assuming the 90 days horizon American Beacon Small is expected to generate 0.99 times more return on investment than Keeley Small. However, American Beacon Small is 1.01 times less risky than Keeley Small. It trades about 0.05 of its potential returns per unit of risk. Keeley Small Cap is currently generating about 0.03 per unit of risk. If you would invest 2,194 in American Beacon Small on August 29, 2024 and sell it today you would earn a total of 728.00 from holding American Beacon Small or generate 33.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Small vs. Keeley Small Cap
Performance |
| Timeline |
| American Beacon Small |
| Keeley Small Cap |
American Beacon and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Keeley Small
The main advantage of trading using opposite American Beacon and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Keeley Small 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 Keeley Small will offset losses from the drop in Keeley Small's long position.| American Beacon vs. American Beacon International | American Beacon vs. American Beacon Large | American Beacon vs. Fidelity Low Priced Stock | American Beacon vs. Europacific Growth Fund |
| Keeley Small vs. Vanguard Global Credit | Keeley Small vs. The Hartford Global | Keeley Small vs. Rbb Fund Trust | Keeley Small vs. T Rowe Price |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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