Correlation Between Balanced Fund and American Beacon
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and American Beacon Twentyfour, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and American Beacon.
Diversification Opportunities for Balanced Fund and American Beacon
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Balanced and American is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail 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 Balanced Fund 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 Balanced Fund Retail 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 Balanced Fund i.e., Balanced Fund and American Beacon go up and down completely randomly.
Pair Corralation between Balanced Fund and American Beacon
Assuming the 90 days horizon Balanced Fund Retail is expected to generate 2.13 times more return on investment than American Beacon. However, Balanced Fund is 2.13 times more volatile than American Beacon Twentyfour. It trades about 0.1 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.12 per unit of risk. If you would invest 1,145 in Balanced Fund Retail on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Balanced Fund Retail or generate 26.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Balanced Fund Retail vs. American Beacon Twentyfour
Performance |
| Timeline |
| Balanced Fund Retail |
| American Beacon Twen |
Balanced Fund and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and American Beacon
The main advantage of trading using opposite Balanced Fund and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
| American Beacon vs. Maryland Tax Free Bond | American Beacon vs. Artisan High Income | American Beacon vs. Touchstone Premium Yield | American Beacon vs. Bbh Intermediate Municipal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |