Correlation Between American Beacon and EA Series
Can any of the company-specific risk be diversified away by investing in both American Beacon and EA Series 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 American Beacon and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Select and EA Series Trust, you can compare the effects of market volatilities on American Beacon and EA Series 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 American Beacon with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and EA Series.
Diversification Opportunities for American Beacon and EA Series
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and DRLL is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Select and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and American Beacon 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 American Beacon Select are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of American Beacon i.e., American Beacon and EA Series go up and down completely randomly.
Pair Corralation between American Beacon and EA Series
Given the investment horizon of 90 days American Beacon is expected to generate 1.04 times less return on investment than EA Series. In addition to that, American Beacon is 1.1 times more volatile than EA Series Trust. It trades about 0.23 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.26 per unit of volatility. If you would invest 2,841 in EA Series Trust on August 28, 2024 and sell it today you would earn a total of 192.00 from holding EA Series Trust or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Select vs. EA Series Trust
Performance |
| Timeline |
| American Beacon Select |
| EA Series Trust |
American Beacon and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and EA Series
The main advantage of trading using opposite American Beacon and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| American Beacon vs. First Trust Exchange Traded | American Beacon vs. Ultimus Managers Trust | American Beacon vs. Horizon Kinetics Medical | American Beacon vs. Harbor Health Care |
| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. Rumble Inc | EA Series vs. EA Series Trust |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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