Correlation Between American Beacon and Queens Road
Can any of the company-specific risk be diversified away by investing in both American Beacon and Queens Road 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 Queens Road 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 Queens Road Small, you can compare the effects of market volatilities on American Beacon and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Queens Road.
Diversification Opportunities for American Beacon and Queens Road
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and QUEENS is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small 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 Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of American Beacon i.e., American Beacon and Queens Road go up and down completely randomly.
Pair Corralation between American Beacon and Queens Road
Assuming the 90 days horizon American Beacon Small is expected to generate 1.23 times more return on investment than Queens Road. However, American Beacon is 1.23 times more volatile than Queens Road Small. It trades about 0.07 of its potential returns per unit of risk. Queens Road Small is currently generating about 0.08 per unit of risk. If you would invest 2,255 in American Beacon Small on August 28, 2024 and sell it today you would earn a total of 691.00 from holding American Beacon Small or generate 30.64% 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. Queens Road Small
Performance |
| Timeline |
| American Beacon Small |
| Queens Road Small |
American Beacon and Queens Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Queens Road
The main advantage of trading using opposite American Beacon and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road'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 |
| Queens Road vs. Aqr Large Cap | Queens Road vs. Siit Large Cap | Queens Road vs. T Rowe Price | Queens Road vs. Fisher Large 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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