Correlation Between American Beacon and Managed Volatility
Can any of the company-specific risk be diversified away by investing in both American Beacon and Managed Volatility 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 Managed Volatility 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 Managed Volatility Fund, you can compare the effects of market volatilities on American Beacon and Managed Volatility 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 Managed Volatility. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Managed Volatility.
Diversification Opportunities for American Beacon and Managed Volatility
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Managed is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Managed Volatility Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Volatility 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 Managed Volatility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Volatility has no effect on the direction of American Beacon i.e., American Beacon and Managed Volatility go up and down completely randomly.
Pair Corralation between American Beacon and Managed Volatility
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 0.46 times more return on investment than Managed Volatility. However, American Beacon Bridgeway is 2.19 times less risky than Managed Volatility. It trades about 0.14 of its potential returns per unit of risk. Managed Volatility Fund is currently generating about -0.04 per unit of risk. If you would invest 2,628 in American Beacon Bridgeway on August 25, 2024 and sell it today you would earn a total of 1,162 from holding American Beacon Bridgeway or generate 44.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.63% |
Values | Daily Returns |
American Beacon Bridgeway vs. Managed Volatility Fund
Performance |
Timeline |
American Beacon Bridgeway |
Managed Volatility |
American Beacon and Managed Volatility Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and Managed Volatility
The main advantage of trading using opposite American Beacon and Managed Volatility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Managed Volatility 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 Managed Volatility will offset losses from the drop in Managed Volatility's long position.American Beacon vs. Victory Integrity Small Cap | American Beacon vs. The Hartford Small | American Beacon vs. Touchstone Small Cap | American Beacon vs. Nationwide Small Cap |
Managed Volatility vs. Nuveen Short Term | Managed Volatility vs. Rbc Short Duration | Managed Volatility vs. Siit Ultra Short | Managed Volatility vs. Touchstone Ultra Short |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |