Correlation Between Lsv Small and American Beacon
Can any of the company-specific risk be diversified away by investing in both Lsv Small 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 Lsv Small and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and American Beacon Garcia, you can compare the effects of market volatilities on Lsv Small 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 Lsv Small with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and American Beacon.
Diversification Opportunities for Lsv Small and American Beacon
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lsv and American is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and American Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Garcia and Lsv Small 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 Lsv Small Cap 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 Garcia has no effect on the direction of Lsv Small i.e., Lsv Small and American Beacon go up and down completely randomly.
Pair Corralation between Lsv Small and American Beacon
Assuming the 90 days horizon Lsv Small is expected to generate 126.33 times less return on investment than American Beacon. In addition to that, Lsv Small is 2.13 times more volatile than American Beacon Garcia. It trades about 0.0 of its total potential returns per unit of risk. American Beacon Garcia is currently generating about 0.11 per unit of volatility. If you would invest 850.00 in American Beacon Garcia on September 13, 2024 and sell it today you would earn a total of 7.00 from holding American Beacon Garcia or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lsv Small Cap vs. American Beacon Garcia
Performance |
| Timeline |
| Lsv Small Cap |
| American Beacon Garcia |
Lsv Small and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and American Beacon
The main advantage of trading using opposite Lsv Small and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small 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.| Lsv Small vs. Amg Timessquare Mid | Lsv Small vs. Lsv Value Equity | Lsv Small vs. Baron Discovery Fund | Lsv Small vs. Victory Sycamore Established |
| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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