Correlation Between Lgm Risk and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Lgm Risk and Amer 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 Lgm Risk and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Amer Beacon Garcia, you can compare the effects of market volatilities on Lgm Risk and Amer 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 Lgm Risk with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Amer Beacon.
Diversification Opportunities for Lgm Risk and Amer Beacon
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lgm and Amer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Amer Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Garcia and Lgm Risk 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 Lgm Risk Managed are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Garcia has no effect on the direction of Lgm Risk i.e., Lgm Risk and Amer Beacon go up and down completely randomly.
Pair Corralation between Lgm Risk and Amer Beacon
Assuming the 90 days horizon Lgm Risk Managed is expected to generate 0.9 times more return on investment than Amer Beacon. However, Lgm Risk Managed is 1.12 times less risky than Amer Beacon. It trades about 0.11 of its potential returns per unit of risk. Amer Beacon Garcia is currently generating about 0.04 per unit of risk. If you would invest 1,094 in Lgm Risk Managed on September 12, 2024 and sell it today you would earn a total of 57.00 from holding Lgm Risk Managed or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lgm Risk Managed vs. Amer Beacon Garcia
Performance |
| Timeline |
| Lgm Risk Managed |
| Amer Beacon Garcia |
Lgm Risk and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Amer Beacon
The main advantage of trading using opposite Lgm Risk and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk position performs unexpectedly, Amer 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Lgm Risk vs. Guggenheim Diversified Income | Lgm Risk vs. Wealthbuilder Conservative Allocation | Lgm Risk vs. Jpmorgan Diversified Fund | Lgm Risk vs. Federated Hermes Conservative |
| Amer Beacon vs. Huber Capital Equity | Amer Beacon vs. Us Strategic Equity | Amer Beacon vs. Locorr Dynamic Equity | Amer Beacon vs. Ab Fixed Income Shares |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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