Correlation Between Multisector Bond and American Beacon
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and American Beacon Glg, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and American Beacon.
Diversification Opportunities for Multisector Bond and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multisector and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma 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 Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and American Beacon go up and down completely randomly.
Pair Corralation between Multisector Bond and American Beacon
If you would invest 1,101 in Multisector Bond Sma on September 14, 2024 and sell it today you would earn a total of 271.00 from holding Multisector Bond Sma or generate 24.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. American Beacon Glg
Performance |
| Timeline |
| Multisector Bond Sma |
| American Beacon Glg |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Multisector Bond and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and American Beacon
The main advantage of trading using opposite Multisector Bond and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Lord Abbett Diversified | Multisector Bond vs. Adams Diversified Equity | Multisector Bond vs. Western Asset Diversified |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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