Correlation Between American Independence and American Beacon
Can any of the company-specific risk be diversified away by investing in both American Independence 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 American Independence and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Independence Kansas and American Beacon Glg, you can compare the effects of market volatilities on American Independence 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 American Independence with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Independence and American Beacon.
Diversification Opportunities for American Independence and American Beacon
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 Independence Kansas and American Beacon Glg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Glg and American Independence 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 Independence Kansas 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 Glg has no effect on the direction of American Independence i.e., American Independence and American Beacon go up and down completely randomly.
Pair Corralation between American Independence and American Beacon
If you would invest (100.00) in American Beacon Glg on September 12, 2024 and sell it today you would earn a total of 100.00 from holding American Beacon Glg 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 Independence Kansas vs. American Beacon Glg
Performance |
| Timeline |
| American Independence |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Beacon Glg |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Independence and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Independence and American Beacon
The main advantage of trading using opposite American Independence and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Independence 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.| American Independence vs. Fisher Large Cap | American Independence vs. Washington Mutual Investors | American Independence vs. Pace Large Growth | American Independence vs. Alternative Asset Allocation |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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