Correlation Between Amer Beacon and American Beacon
Can any of the company-specific risk be diversified away by investing in both Amer Beacon 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 Amer Beacon and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Beacon Garcia and American Beacon Shapiro, you can compare the effects of market volatilities on Amer Beacon 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 Amer Beacon with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Beacon and American Beacon.
Diversification Opportunities for Amer Beacon and American Beacon
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amer and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Garcia and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro and Amer Beacon 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 Amer Beacon Garcia 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 Shapiro has no effect on the direction of Amer Beacon i.e., Amer Beacon and American Beacon go up and down completely randomly.
Pair Corralation between Amer Beacon and American Beacon
Assuming the 90 days horizon Amer Beacon Garcia is expected to generate 0.56 times more return on investment than American Beacon. However, Amer Beacon Garcia is 1.79 times less risky than American Beacon. It trades about 0.09 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about -0.15 per unit of risk. If you would invest 857.00 in Amer Beacon Garcia on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Amer Beacon Garcia or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amer Beacon Garcia vs. American Beacon Shapiro
Performance |
| Timeline |
| Amer Beacon Garcia |
| American Beacon Shapiro |
Amer Beacon and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Beacon and American Beacon
The main advantage of trading using opposite Amer Beacon and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Beacon 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.| Amer Beacon vs. Small Pany Growth | Amer Beacon vs. Praxis Growth Index | Amer Beacon vs. Qs Growth Fund | Amer Beacon vs. Tfa Alphagen Growth |
| American Beacon vs. Fidelity Advisor Diversified | American Beacon vs. Federated Hermes Conservative | American Beacon vs. Guggenheim Diversified Income | American Beacon vs. Aqr Diversified Arbitrage |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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