Correlation Between Ms Global and American Beacon
Can any of the company-specific risk be diversified away by investing in both Ms Global 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 Ms Global and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ms Global Fixed and American Beacon Ssi, you can compare the effects of market volatilities on Ms Global 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 Ms Global with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ms Global and American Beacon.
Diversification Opportunities for Ms Global and American Beacon
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFIRX and American is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ms Global Fixed and American Beacon Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ssi and Ms Global 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 Ms Global Fixed 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 Ssi has no effect on the direction of Ms Global i.e., Ms Global and American Beacon go up and down completely randomly.
Pair Corralation between Ms Global and American Beacon
Assuming the 90 days horizon Ms Global Fixed is expected to under-perform the American Beacon. In addition to that, Ms Global is 2.2 times more volatile than American Beacon Ssi. It trades about -0.1 of its total potential returns per unit of risk. American Beacon Ssi is currently generating about 0.54 per unit of volatility. If you would invest 987.00 in American Beacon Ssi on August 28, 2024 and sell it today you would earn a total of 14.00 from holding American Beacon Ssi or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ms Global Fixed vs. American Beacon Ssi
Performance |
| Timeline |
| Ms Global Fixed |
| American Beacon Ssi |
Ms Global and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ms Global and American Beacon
The main advantage of trading using opposite Ms Global and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ms Global 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.| Ms Global vs. Emerging Markets Equity | Ms Global vs. Global E Portfolio | Ms Global vs. Global E Portfolio | Ms Global vs. Global Centrated Portfolio |
| American Beacon vs. Commonwealth Global Fund | American Beacon vs. Ab Global Risk | American Beacon vs. Dreyfusstandish Global Fixed | American Beacon vs. Ms Global Fixed |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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