Correlation Between American Beacon and WHITEWOLF Publicly
Can any of the company-specific risk be diversified away by investing in both American Beacon and WHITEWOLF Publicly 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 WHITEWOLF Publicly 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 WHITEWOLF Publicly Listed, you can compare the effects of market volatilities on American Beacon and WHITEWOLF Publicly 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 WHITEWOLF Publicly. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and WHITEWOLF Publicly.
Diversification Opportunities for American Beacon and WHITEWOLF Publicly
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and WHITEWOLF is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Select and WHITEWOLF Publicly Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHITEWOLF Publicly Listed 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 WHITEWOLF Publicly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHITEWOLF Publicly Listed has no effect on the direction of American Beacon i.e., American Beacon and WHITEWOLF Publicly go up and down completely randomly.
Pair Corralation between American Beacon and WHITEWOLF Publicly
Given the investment horizon of 90 days American Beacon is expected to generate 2.35 times less return on investment than WHITEWOLF Publicly. In addition to that, American Beacon is 1.0 times more volatile than WHITEWOLF Publicly Listed. It trades about 0.06 of its total potential returns per unit of risk. WHITEWOLF Publicly Listed is currently generating about 0.15 per unit of volatility. If you would invest 3,171 in WHITEWOLF Publicly Listed on September 12, 2024 and sell it today you would earn a total of 229.00 from holding WHITEWOLF Publicly Listed or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Select vs. WHITEWOLF Publicly Listed
Performance |
| Timeline |
| American Beacon Select |
| WHITEWOLF Publicly Listed |
American Beacon and WHITEWOLF Publicly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and WHITEWOLF Publicly
The main advantage of trading using opposite American Beacon and WHITEWOLF Publicly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, WHITEWOLF Publicly 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 WHITEWOLF Publicly will offset losses from the drop in WHITEWOLF Publicly's long position.| American Beacon vs. Columbia Emerging Markets | American Beacon vs. Direxion Daily Homebuilders | American Beacon vs. Direxion Daily Cnsmr | American Beacon vs. Fidelity MSCI Consumer |
| WHITEWOLF Publicly vs. Invesco Global Listed | WHITEWOLF Publicly vs. SCOR PK | WHITEWOLF Publicly vs. Morningstar Unconstrained Allocation | WHITEWOLF Publicly vs. Thrivent High Yield |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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