Correlation Between American Beacon and Blackrock Moderate
Can any of the company-specific risk be diversified away by investing in both American Beacon and Blackrock Moderate 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 Blackrock Moderate 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 Blackrock Moderate Prepared, you can compare the effects of market volatilities on American Beacon and Blackrock Moderate 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 Blackrock Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Blackrock Moderate.
Diversification Opportunities for American Beacon and Blackrock Moderate
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Blackrock is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Blackrock Moderate Prepared in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Moderate 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 Blackrock Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Moderate has no effect on the direction of American Beacon i.e., American Beacon and Blackrock Moderate go up and down completely randomly.
Pair Corralation between American Beacon and Blackrock Moderate
Assuming the 90 days horizon American Beacon Bridgeway is expected to under-perform the Blackrock Moderate. In addition to that, American Beacon is 2.22 times more volatile than Blackrock Moderate Prepared. It trades about -0.09 of its total potential returns per unit of risk. Blackrock Moderate Prepared is currently generating about 0.26 per unit of volatility. If you would invest 1,330 in Blackrock Moderate Prepared on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Blackrock Moderate Prepared or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Beacon Bridgeway vs. Blackrock Moderate Prepared
Performance |
| Timeline |
| American Beacon Bridgeway |
| Blackrock Moderate |
American Beacon and Blackrock Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Blackrock Moderate
The main advantage of trading using opposite American Beacon and Blackrock Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Blackrock Moderate 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 Blackrock Moderate will offset losses from the drop in Blackrock Moderate's long position.| American Beacon vs. Blackrock Moderate Prepared | American Beacon vs. Qs Moderate Growth | American Beacon vs. Strategic Allocation Moderate | American Beacon vs. Sa Worldwide Moderate |
| Blackrock Moderate vs. Quantitative Longshort Equity | Blackrock Moderate vs. Delaware Investments Ultrashort | Blackrock Moderate vs. Barings Active Short | Blackrock Moderate vs. Dreyfus Short Intermediate |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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