Correlation Between American Beacon and Ab Centrated
Can any of the company-specific risk be diversified away by investing in both American Beacon and Ab Centrated 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 Ab Centrated 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 Ab Centrated Growth, you can compare the effects of market volatilities on American Beacon and Ab Centrated 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 Ab Centrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Ab Centrated.
Diversification Opportunities for American Beacon and Ab Centrated
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and WPSIX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Ab Centrated Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Centrated Growth 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 Ab Centrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Centrated Growth has no effect on the direction of American Beacon i.e., American Beacon and Ab Centrated go up and down completely randomly.
Pair Corralation between American Beacon and Ab Centrated
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 1.21 times more return on investment than Ab Centrated. However, American Beacon is 1.21 times more volatile than Ab Centrated Growth. It trades about 0.17 of its potential returns per unit of risk. Ab Centrated Growth is currently generating about 0.09 per unit of risk. If you would invest 3,442 in American Beacon Bridgeway on September 12, 2024 and sell it today you would earn a total of 341.00 from holding American Beacon Bridgeway or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. Ab Centrated Growth
Performance |
| Timeline |
| American Beacon Bridgeway |
| Ab Centrated Growth |
American Beacon and Ab Centrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Ab Centrated
The main advantage of trading using opposite American Beacon and Ab Centrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Ab Centrated 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 Ab Centrated will offset losses from the drop in Ab Centrated'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 |
| Ab Centrated vs. American Funds The | Ab Centrated vs. American Funds The | Ab Centrated vs. Growth Fund Of | Ab Centrated vs. Growth Fund Of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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