Correlation Between Blrc Sgy and American Beacon
Can any of the company-specific risk be diversified away by investing in both Blrc Sgy 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 Blrc Sgy and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blrc Sgy Mnp and American Beacon Stephens, you can compare the effects of market volatilities on Blrc Sgy 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 Blrc Sgy with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blrc Sgy and American Beacon.
Diversification Opportunities for Blrc Sgy and American Beacon
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blrc and American is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blrc Sgy Mnp and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens and Blrc Sgy 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 Blrc Sgy Mnp 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 Stephens has no effect on the direction of Blrc Sgy i.e., Blrc Sgy and American Beacon go up and down completely randomly.
Pair Corralation between Blrc Sgy and American Beacon
Assuming the 90 days horizon Blrc Sgy Mnp is expected to generate 0.19 times more return on investment than American Beacon. However, Blrc Sgy Mnp is 5.17 times less risky than American Beacon. It trades about 0.49 of its potential returns per unit of risk. American Beacon Stephens is currently generating about 0.07 per unit of risk. If you would invest 1,055 in Blrc Sgy Mnp on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Blrc Sgy Mnp or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blrc Sgy Mnp vs. American Beacon Stephens
Performance |
| Timeline |
| Blrc Sgy Mnp |
| American Beacon Stephens |
Blrc Sgy and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blrc Sgy and American Beacon
The main advantage of trading using opposite Blrc Sgy and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blrc Sgy 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.| Blrc Sgy vs. Vanguard High Yield Tax Exempt | Blrc Sgy vs. SCOR PK | Blrc Sgy vs. Morningstar Unconstrained Allocation | Blrc Sgy vs. Thrivent High Yield |
| American Beacon vs. T Rowe Price | American Beacon vs. T Rowe Price | American Beacon vs. SCOR PK | American Beacon vs. Morningstar Unconstrained Allocation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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