Correlation Between Barings Global and American Beacon
Can any of the company-specific risk be diversified away by investing in both Barings Global 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 Global 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 Global Floating and American Beacon Twentyfour, you can compare the effects of market volatilities on Barings Global 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 Global with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and American Beacon.
Diversification Opportunities for Barings Global and American Beacon
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and American is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen and Barings Global 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 Global Floating 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 Twen has no effect on the direction of Barings Global i.e., Barings Global and American Beacon go up and down completely randomly.
Pair Corralation between Barings Global and American Beacon
Assuming the 90 days horizon Barings Global Floating is expected to under-perform the American Beacon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings Global Floating is 1.79 times less risky than American Beacon. The mutual fund trades about -0.08 of its potential returns per unit of risk. The American Beacon Twentyfour is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 863.00 in American Beacon Twentyfour on November 9, 2024 and sell it today you would earn a total of 5.00 from holding American Beacon Twentyfour or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. American Beacon Twentyfour
Performance |
| Timeline |
| Barings Global Floating |
| American Beacon Twen |
Barings Global and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and American Beacon
The main advantage of trading using opposite Barings Global and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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 Global vs. Fuhkbx | Barings Global vs. Flakqx | Barings Global vs. Flkypx | Barings Global vs. Small Pany Growth |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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