Correlation Between Chestnut Street and American Beacon
Can any of the company-specific risk be diversified away by investing in both Chestnut Street 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 Chestnut Street and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and American Beacon Twentyfour, you can compare the effects of market volatilities on Chestnut Street 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 Chestnut Street with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and American Beacon.
Diversification Opportunities for Chestnut Street and American Beacon
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chestnut and American is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange 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 Chestnut Street 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 Chestnut Street Exchange 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 Chestnut Street i.e., Chestnut Street and American Beacon go up and down completely randomly.
Pair Corralation between Chestnut Street and American Beacon
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 9.72 times more return on investment than American Beacon. However, Chestnut Street is 9.72 times more volatile than American Beacon Twentyfour. It trades about 0.41 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.44 per unit of risk. If you would invest 111,647 in Chestnut Street Exchange on September 2, 2024 and sell it today you would earn a total of 7,045 from holding Chestnut Street Exchange or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. American Beacon Twentyfour
Performance |
| Timeline |
| Chestnut Street Exchange |
| American Beacon Twen |
Chestnut Street and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and American Beacon
The main advantage of trading using opposite Chestnut Street and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street 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.| Chestnut Street vs. Dws Government Money | Chestnut Street vs. Jpmorgan Trust I | Chestnut Street vs. T Rowe Price | Chestnut Street vs. Cref Money Market |
| American Beacon vs. American Century Etf | American Beacon vs. Applied Finance Explorer | American Beacon vs. Mutual Of America | American Beacon vs. Queens Road Small |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |