Correlation Between Amer Beacon and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Amer Beacon and Bond Fund 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 Bond Fund 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 Bond Fund Of, you can compare the effects of market volatilities on Amer Beacon and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Beacon and Bond Fund.
Diversification Opportunities for Amer Beacon and Bond Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amer and Bond is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Garcia and Bond Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Amer Beacon i.e., Amer Beacon and Bond Fund go up and down completely randomly.
Pair Corralation between Amer Beacon and Bond Fund
Assuming the 90 days horizon Amer Beacon is expected to generate 1.09 times less return on investment than Bond Fund. In addition to that, Amer Beacon is 1.35 times more volatile than Bond Fund Of. It trades about 0.03 of its total potential returns per unit of risk. Bond Fund Of is currently generating about 0.04 per unit of volatility. If you would invest 1,126 in Bond Fund Of on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Bond Fund Of or generate 0.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amer Beacon Garcia vs. Bond Fund Of
Performance |
Timeline |
Amer Beacon Garcia |
Bond Fund |
Amer Beacon and Bond Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amer Beacon and Bond Fund
The main advantage of trading using opposite Amer Beacon and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Beacon position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.Amer Beacon vs. American Beacon Ssi | Amer Beacon vs. American Beacon Bridgeway | Amer Beacon vs. American Beacon Bridgeway | Amer Beacon vs. American Beacon Twentyfour |
Bond Fund vs. Income Fund Of | Bond Fund vs. New World Fund | Bond Fund vs. American Mutual Fund | Bond Fund vs. American Mutual Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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