Correlation Between Cardinal Small and American Beacon
Can any of the company-specific risk be diversified away by investing in both Cardinal Small 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 Cardinal Small and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Small Cap and American Beacon The, you can compare the effects of market volatilities on Cardinal Small 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 Cardinal Small with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Small and American Beacon.
Diversification Opportunities for Cardinal Small and American Beacon
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and American is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap and American Beacon The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon and Cardinal Small 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 Cardinal Small Cap 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 has no effect on the direction of Cardinal Small i.e., Cardinal Small and American Beacon go up and down completely randomly.
Pair Corralation between Cardinal Small and American Beacon
Assuming the 90 days horizon Cardinal Small is expected to generate 17.27 times less return on investment than American Beacon. But when comparing it to its historical volatility, Cardinal Small Cap is 35.61 times less risky than American Beacon. It trades about 0.22 of its potential returns per unit of risk. American Beacon The is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,347 in American Beacon The on September 12, 2024 and sell it today you would earn a total of 85.00 from holding American Beacon The or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Cardinal Small Cap vs. American Beacon The
Performance |
| Timeline |
| Cardinal Small Cap |
| American Beacon |
Cardinal Small and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Small and American Beacon
The main advantage of trading using opposite Cardinal Small and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small 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.| Cardinal Small vs. New Economy Fund | Cardinal Small vs. Vanguard Growth Index | Cardinal Small vs. Fidelity Trend Fund | Cardinal Small vs. Kinetics Paradigm Fund |
| American Beacon vs. Lebenthal Lisanti Small | American Beacon vs. Kinetics Small Cap | American Beacon vs. Pace Smallmedium Value | American Beacon vs. Cardinal Small 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |