Correlation Between Conservative Balanced and American Beacon
Can any of the company-specific risk be diversified away by investing in both Conservative Balanced 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 Conservative Balanced and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conservative Balanced Allocation and American Beacon Intl, you can compare the effects of market volatilities on Conservative Balanced 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 Conservative Balanced with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conservative Balanced and American Beacon.
Diversification Opportunities for Conservative Balanced and American Beacon
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Conservative and American is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Conservative Balanced Allocati and American Beacon Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Intl and Conservative Balanced 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 Conservative Balanced Allocation 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 Intl has no effect on the direction of Conservative Balanced i.e., Conservative Balanced and American Beacon go up and down completely randomly.
Pair Corralation between Conservative Balanced and American Beacon
Assuming the 90 days horizon Conservative Balanced Allocation is expected to under-perform the American Beacon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Conservative Balanced Allocation is 2.16 times less risky than American Beacon. The mutual fund trades about -0.04 of its potential returns per unit of risk. The American Beacon Intl is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,638 in American Beacon Intl on December 26, 2024 and sell it today you would earn a total of 61.00 from holding American Beacon Intl or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Conservative Balanced Allocati vs. American Beacon Intl
Performance |
| Timeline |
| Conservative Balanced |
| American Beacon Intl |
Conservative Balanced and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conservative Balanced and American Beacon
The main advantage of trading using opposite Conservative Balanced and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conservative Balanced 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.| Conservative Balanced vs. Dodge Global Stock | Conservative Balanced vs. Dws Global Macro | Conservative Balanced vs. Ab Global Bond | Conservative Balanced vs. Tweedy Browne Global |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |