Correlation Between American Beacon and American Mutual
Can any of the company-specific risk be diversified away by investing in both American Beacon and American Mutual 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 American Beacon and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Glg and American Mutual Fund, you can compare the effects of market volatilities on American Beacon and American Mutual 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 American Beacon with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and American Mutual.
Diversification Opportunities for American Beacon and American Mutual
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Glg and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and American 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 American Beacon Glg are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of American Beacon i.e., American Beacon and American Mutual go up and down completely randomly.
Pair Corralation between American Beacon and American Mutual
If you would invest (100.00) in American Mutual Fund on September 12, 2024 and sell it today you would earn a total of 100.00 from holding American Mutual Fund or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Glg vs. American Mutual Fund
Performance |
| Timeline |
| American Beacon Glg |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Beacon and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and American Mutual
The main advantage of trading using opposite American Beacon and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual's long position.| American Beacon vs. Scharf Global Opportunity | American Beacon vs. Commonwealth Global Fund | American Beacon vs. Morningstar Global Income | American Beacon vs. Ab Global Risk |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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