Correlation Between American Beacon and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both American Beacon and Vanguard Value 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 Vanguard Value 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 Vanguard Value Index, you can compare the effects of market volatilities on American Beacon and Vanguard Value 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 Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Vanguard Value.
Diversification Opportunities for American Beacon and Vanguard Value
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of American Beacon i.e., American Beacon and Vanguard Value go up and down completely randomly.
Pair Corralation between American Beacon and Vanguard Value
Assuming the 90 days horizon American Beacon Bridgeway is expected to generate 1.23 times more return on investment than Vanguard Value. However, American Beacon is 1.23 times more volatile than Vanguard Value Index. It trades about -0.06 of its potential returns per unit of risk. Vanguard Value Index is currently generating about -0.09 per unit of risk. If you would invest 2,835 in American Beacon Bridgeway on September 13, 2024 and sell it today you would lose (24.00) from holding American Beacon Bridgeway or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Bridgeway vs. Vanguard Value Index
Performance |
| Timeline |
| American Beacon Bridgeway |
| Vanguard Value Index |
American Beacon and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Vanguard Value
The main advantage of trading using opposite American Beacon and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Vanguard Value 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 Vanguard Value will offset losses from the drop in Vanguard Value's long position.| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
| Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |