Correlation Between American Beacon and The Tocqueville
Can any of the company-specific risk be diversified away by investing in both American Beacon and The Tocqueville 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 The Tocqueville 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 The Tocqueville International, you can compare the effects of market volatilities on American Beacon and The Tocqueville 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 The Tocqueville. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and The Tocqueville.
Diversification Opportunities for American Beacon and The Tocqueville
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and THE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville Inte 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 The Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville Inte has no effect on the direction of American Beacon i.e., American Beacon and The Tocqueville go up and down completely randomly.
Pair Corralation between American Beacon and The Tocqueville
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 1.53 times more return on investment than The Tocqueville. However, American Beacon is 1.53 times more volatile than The Tocqueville International. It trades about 0.32 of its potential returns per unit of risk. The Tocqueville International is currently generating about 0.08 per unit of risk. If you would invest 2,696 in American Beacon Bridgeway on September 1, 2024 and sell it today you would earn a total of 194.00 from holding American Beacon Bridgeway or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. The Tocqueville International
Performance |
| Timeline |
| American Beacon Bridgeway |
| Tocqueville Inte |
American Beacon and The Tocqueville Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and The Tocqueville
The main advantage of trading using opposite American Beacon and The Tocqueville positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, The Tocqueville 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 The Tocqueville will offset losses from the drop in The Tocqueville's long position.| American Beacon vs. American Beacon Bridgeway | American Beacon vs. Small Cap Value Fund | American Beacon vs. Managed Volatility Fund | American Beacon vs. Ultra Small Pany Market |
| The Tocqueville vs. American Beacon Ssi | The Tocqueville vs. American Beacon Bridgeway | The Tocqueville vs. American Beacon Bridgeway | The Tocqueville vs. American Beacon Twentyfour |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |