Correlation Between Gabelli Global and American Beacon
Can any of the company-specific risk be diversified away by investing in both Gabelli 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 Gabelli 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 Gabelli Global Financial and American Beacon Funds, you can compare the effects of market volatilities on Gabelli 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 Gabelli Global with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and American Beacon.
Diversification Opportunities for Gabelli Global and American Beacon
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gabelli and American is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial and American Beacon Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Funds and Gabelli 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 Gabelli Global Financial 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 Funds has no effect on the direction of Gabelli Global i.e., Gabelli Global and American Beacon go up and down completely randomly.
Pair Corralation between Gabelli Global and American Beacon
Assuming the 90 days horizon Gabelli Global Financial is expected to under-perform the American Beacon. In addition to that, Gabelli Global is 4.95 times more volatile than American Beacon Funds. It trades about -0.04 of its total potential returns per unit of risk. American Beacon Funds is currently generating about 0.38 per unit of volatility. If you would invest 853.00 in American Beacon Funds on September 13, 2024 and sell it today you would earn a total of 9.00 from holding American Beacon Funds or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Financial vs. American Beacon Funds
Performance |
| Timeline |
| Gabelli Global Financial |
| American Beacon Funds |
Gabelli Global and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and American Beacon
The main advantage of trading using opposite Gabelli Global and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli 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.| Gabelli Global vs. Gabelli Esg Fund | Gabelli Global vs. The Gabelli Equity | Gabelli Global vs. Gamco International Growth | Gabelli Global vs. Enterprise Mergers And |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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