Correlation Between Bond Fund and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Amer 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 Bond Fund and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Of and Amer Beacon Garcia, you can compare the effects of market volatilities on Bond Fund and Amer 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 Bond Fund with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Amer Beacon.
Diversification Opportunities for Bond Fund and Amer Beacon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Bond and Amer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of and Amer Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Garcia and Bond Fund 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 Bond Fund Of are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Garcia has no effect on the direction of Bond Fund i.e., Bond Fund and Amer Beacon go up and down completely randomly.
Pair Corralation between Bond Fund and Amer Beacon
Assuming the 90 days horizon Bond Fund is expected to generate 1.11 times less return on investment than Amer Beacon. But when comparing it to its historical volatility, Bond Fund Of is 1.35 times less risky than Amer Beacon. It trades about 0.08 of its potential returns per unit of risk. Amer Beacon Garcia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 833.00 in Amer Beacon Garcia on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Amer Beacon Garcia or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bond Fund Of vs. Amer Beacon Garcia
Performance |
| Timeline |
| Bond Fund |
| Amer Beacon Garcia |
Bond Fund and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Amer Beacon
The main advantage of trading using opposite Bond Fund and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Amer 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Bond Fund vs. American High Income | Bond Fund vs. Europacific Growth Fund | Bond Fund vs. Capital World Bond | Bond Fund vs. Growth Fund Of |
| Amer Beacon vs. Virtus Convertible | Amer Beacon vs. Advent Claymore Convertible | Amer Beacon vs. Lord Abbett Convertible | Amer Beacon vs. Columbia Vertible Securities |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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