Correlation Between American Beacon and The Hartford
Can any of the company-specific risk be diversified away by investing in both American Beacon and The Hartford 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 Hartford 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 Hartford International, you can compare the effects of market volatilities on American Beacon and The Hartford 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 Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and The Hartford.
Diversification Opportunities for American Beacon and The Hartford
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and The is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna 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 Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Interna has no effect on the direction of American Beacon i.e., American Beacon and The Hartford go up and down completely randomly.
Pair Corralation between American Beacon and The Hartford
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 1.0 times more return on investment than The Hartford. However, American Beacon Bridgeway is 1.0 times less risky than The Hartford. It trades about 0.13 of its potential returns per unit of risk. The Hartford International is currently generating about -0.01 per unit of risk. If you would invest 2,492 in American Beacon Bridgeway on September 1, 2024 and sell it today you would earn a total of 364.00 from holding American Beacon Bridgeway or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
American Beacon Bridgeway vs. The Hartford International
Performance |
| Timeline |
| American Beacon Bridgeway |
| Hartford Interna |
American Beacon and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and The Hartford
The main advantage of trading using opposite American Beacon and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, The Hartford 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 Hartford will offset losses from the drop in The Hartford'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 |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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