Correlation Between Hood River and American Beacon
Can any of the company-specific risk be diversified away by investing in both Hood River 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 Hood River and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hood River New and American Beacon Ark, you can compare the effects of market volatilities on Hood River 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 Hood River with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hood River and American Beacon.
Diversification Opportunities for Hood River and American Beacon
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hood and American is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hood River New and American Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ark and Hood River 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 Hood River New 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 Ark has no effect on the direction of Hood River i.e., Hood River and American Beacon go up and down completely randomly.
Pair Corralation between Hood River and American Beacon
Assuming the 90 days horizon Hood River New is expected to generate 0.57 times more return on investment than American Beacon. However, Hood River New is 1.75 times less risky than American Beacon. It trades about 0.33 of its potential returns per unit of risk. American Beacon Ark is currently generating about 0.07 per unit of risk. If you would invest 1,000.00 in Hood River New on September 4, 2024 and sell it today you would earn a total of 420.00 from holding Hood River New or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 28.97% |
| Values | Daily Returns |
Hood River New vs. American Beacon Ark
Performance |
| Timeline |
| Hood River New |
| American Beacon Ark |
Hood River and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hood River and American Beacon
The main advantage of trading using opposite Hood River and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hood River 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.| Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard 500 Index | Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard Total Stock |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour | American Beacon vs. American Beacon Twentyfour |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |