Correlation Between Barings Active and American Beacon
Can any of the company-specific risk be diversified away by investing in both Barings Active and American Beacon 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 Barings Active and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and American Beacon Intl, you can compare the effects of market volatilities on Barings Active and American Beacon 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 Barings Active with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and American Beacon.
Diversification Opportunities for Barings Active and American Beacon
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and American is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and American Beacon Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Intl and Barings Active 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 Barings Active Short are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Intl has no effect on the direction of Barings Active i.e., Barings Active and American Beacon go up and down completely randomly.
Pair Corralation between Barings Active and American Beacon
Assuming the 90 days horizon Barings Active Short is expected to generate 0.16 times more return on investment than American Beacon. However, Barings Active Short is 6.41 times less risky than American Beacon. It trades about 0.14 of its potential returns per unit of risk. American Beacon Intl is currently generating about -0.21 per unit of risk. If you would invest 920.00 in Barings Active Short on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Barings Active Short or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. American Beacon Intl
Performance |
| Timeline |
| Barings Active Short |
| American Beacon Intl |
Barings Active and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and American Beacon
The main advantage of trading using opposite Barings Active and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| American Beacon vs. Astor Longshort Fund | American Beacon vs. Barings Active Short | American Beacon vs. Sterling Capital Short | American Beacon vs. Quantitative Longshort Equity |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |