Correlation Between American Beacon and Select Fund
Can any of the company-specific risk be diversified away by investing in both American Beacon and Select Fund 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 Select Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Bridgeway and Select Fund C, you can compare the effects of market volatilities on American Beacon and Select Fund 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 Select Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Select Fund.
Diversification Opportunities for American Beacon and Select Fund
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Select is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Select Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund C 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 Bridgeway are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund C has no effect on the direction of American Beacon i.e., American Beacon and Select Fund go up and down completely randomly.
Pair Corralation between American Beacon and Select Fund
Assuming the 90 days horizon American Beacon is expected to generate 1.16 times less return on investment than Select Fund. In addition to that, American Beacon is 1.08 times more volatile than Select Fund C. It trades about 0.06 of its total potential returns per unit of risk. Select Fund C is currently generating about 0.07 per unit of volatility. If you would invest 6,383 in Select Fund C on November 27, 2024 and sell it today you would earn a total of 2,678 from holding Select Fund C or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. Select Fund C
Performance |
| Timeline |
| American Beacon Bridgeway |
| Select Fund C |
American Beacon and Select Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Select Fund
The main advantage of trading using opposite American Beacon and Select Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Select Fund 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 Select Fund will offset losses from the drop in Select Fund's long position.| American Beacon vs. American Beacon Bridgeway | American Beacon vs. Disciplined Growth Fund | American Beacon vs. Select Fund R | American Beacon vs. Select Fund C |
| Select Fund vs. Doubleline Emerging Markets | Select Fund vs. Barings Active Short | Select Fund vs. T Rowe Price | Select Fund vs. Buffalo High Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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