Correlation Between American Beacon and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both American Beacon and Horizon Kinetics 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 Horizon Kinetics 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 Horizon Kinetics Medical, you can compare the effects of market volatilities on American Beacon and Horizon Kinetics 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 Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Horizon Kinetics.
Diversification Opportunities for American Beacon and Horizon Kinetics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Horizon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Select and Horizon Kinetics Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Medical 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 Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Medical has no effect on the direction of American Beacon i.e., American Beacon and Horizon Kinetics go up and down completely randomly.
Pair Corralation between American Beacon and Horizon Kinetics
Given the investment horizon of 90 days American Beacon Select is expected to generate 1.5 times more return on investment than Horizon Kinetics. However, American Beacon is 1.5 times more volatile than Horizon Kinetics Medical. It trades about 0.09 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.02 per unit of risk. If you would invest 2,420 in American Beacon Select on October 20, 2024 and sell it today you would earn a total of 757.00 from holding American Beacon Select or generate 31.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 48.38% |
| Values | Daily Returns |
American Beacon Select vs. Horizon Kinetics Medical
Performance |
| Timeline |
| American Beacon Select |
| Horizon Kinetics Medical |
American Beacon and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Horizon Kinetics
The main advantage of trading using opposite American Beacon and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Horizon Kinetics 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 Horizon Kinetics will offset losses from the drop in Horizon Kinetics' 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 |
| Horizon Kinetics vs. Harbor Health Care | Horizon Kinetics vs. Myriad Genetics | Horizon Kinetics vs. Genenta Science SpA |
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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