Correlation Between VanEck Vectors and AMERICAN BEACON
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors 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 VanEck Vectors and AMERICAN BEACON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors Moodys and AMERICAN BEACON INTERNATIONAL, you can compare the effects of market volatilities on VanEck Vectors 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 VanEck Vectors with a short position of AMERICAN BEACON. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and AMERICAN BEACON.
Diversification Opportunities for VanEck Vectors and AMERICAN BEACON
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and AMERICAN is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Moodys and AMERICAN BEACON INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN BEACON INTE and VanEck Vectors 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 VanEck Vectors Moodys 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 INTE has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and AMERICAN BEACON go up and down completely randomly.
Pair Corralation between VanEck Vectors and AMERICAN BEACON
Given the investment horizon of 90 days VanEck Vectors Moodys is expected to generate 4.66 times more return on investment than AMERICAN BEACON. However, VanEck Vectors is 4.66 times more volatile than AMERICAN BEACON INTERNATIONAL. It trades about 0.06 of its potential returns per unit of risk. AMERICAN BEACON INTERNATIONAL is currently generating about 0.16 per unit of risk. If you would invest 1,918 in VanEck Vectors Moodys on September 3, 2024 and sell it today you would earn a total of 256.00 from holding VanEck Vectors Moodys or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 54.95% |
| Values | Daily Returns |
VanEck Vectors Moodys vs. AMERICAN BEACON INTERNATIONAL
Performance |
| Timeline |
| VanEck Vectors Moodys |
| AMERICAN BEACON INTE |
VanEck Vectors and AMERICAN BEACON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and AMERICAN BEACON
The main advantage of trading using opposite VanEck Vectors and AMERICAN BEACON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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.| VanEck Vectors vs. iShares iBonds 2026 | VanEck Vectors vs. iShares BBB Rated | VanEck Vectors vs. iShares iBonds Dec | VanEck Vectors vs. iShares 25 Year |
| AMERICAN BEACON vs. FT Vest Equity | AMERICAN BEACON vs. Zillow Group Class | AMERICAN BEACON vs. Northern Lights | AMERICAN BEACON vs. VanEck Vectors Moodys |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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