Correlation Between American Beacon and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both American Beacon and Amg Gwk 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 Amg Gwk 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 Amg Gwk Small, you can compare the effects of market volatilities on American Beacon and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Amg Gwk.
Diversification Opportunities for American Beacon and Amg Gwk
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and AMG is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of American Beacon i.e., American Beacon and Amg Gwk go up and down completely randomly.
Pair Corralation between American Beacon and Amg Gwk
Assuming the 90 days horizon American Beacon is expected to generate 1.4 times less return on investment than Amg Gwk. But when comparing it to its historical volatility, American Beacon Bridgeway is 1.26 times less risky than Amg Gwk. It trades about 0.04 of its potential returns per unit of risk. Amg Gwk Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,852 in Amg Gwk Small on August 26, 2024 and sell it today you would earn a total of 722.00 from holding Amg Gwk Small or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. Amg Gwk Small
Performance |
| Timeline |
| American Beacon Bridgeway |
| Amg Gwk Small |
American Beacon and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Amg Gwk
The main advantage of trading using opposite American Beacon and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk'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 |
| Amg Gwk vs. American Beacon Bridgeway | Amg Gwk vs. John Hancock Disciplined | Amg Gwk vs. Large Cap Fund | Amg Gwk vs. Baird E Plus |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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