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
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and American is 0.76. 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 generate 2.03 times more return on investment than American Beacon. However, Barings Global is 2.03 times more volatile than American Beacon Twentyfour. It trades about 0.19 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.26 per unit of risk. If you would invest 738.00 in Barings Global Floating on November 2, 2024 and sell it today you would earn a total of 137.00 from holding Barings Global Floating or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| 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. Angel Oak Financial | Barings Global vs. Icon Financial Fund | Barings Global vs. John Hancock Financial | Barings Global vs. 1919 Financial Services |
| American Beacon vs. Tax Managed Large Cap | American Beacon vs. Dunham Large Cap | American Beacon vs. Fidelity Large Cap | American Beacon vs. Qs Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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