Correlation Between American Beacon and International Fund
Can any of the company-specific risk be diversified away by investing in both American Beacon and International 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 International 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 International Fund International, you can compare the effects of market volatilities on American Beacon and International 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 International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and International Fund.
Diversification Opportunities for American Beacon and International Fund
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and International is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund 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 International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of American Beacon i.e., American Beacon and International Fund go up and down completely randomly.
Pair Corralation between American Beacon and International Fund
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 1.54 times more return on investment than International Fund. However, American Beacon is 1.54 times more volatile than International Fund International. It trades about 0.2 of its potential returns per unit of risk. International Fund International is currently generating about 0.06 per unit of risk. If you would invest 2,678 in American Beacon Bridgeway on August 26, 2024 and sell it today you would earn a total of 127.00 from holding American Beacon Bridgeway or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. International Fund Internation
Performance |
| Timeline |
| American Beacon Bridgeway |
| International Fund |
American Beacon and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and International Fund
The main advantage of trading using opposite American Beacon and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, International 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 International Fund will offset losses from the drop in International Fund's long position.| American Beacon vs. Amg Managers Skyline | American Beacon vs. The Hartford International | American Beacon vs. Baird E Plus | American Beacon vs. Artisan Developing World |
| International Fund vs. Pimco Moditiesplus Strategy | International Fund vs. The Brown Capital | International Fund vs. Goldman Sachs International | International Fund vs. Cohen Steers Real |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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