Correlation Between Small Pany and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Small Pany and Amer 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 Small Pany and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Amer Beacon Ark, you can compare the effects of market volatilities on Small Pany and Amer 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 Small Pany with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and Amer Beacon.
Diversification Opportunities for Small Pany and Amer Beacon
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Amer is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Small Pany 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 Small Pany Growth are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Small Pany i.e., Small Pany and Amer Beacon go up and down completely randomly.
Pair Corralation between Small Pany and Amer Beacon
Assuming the 90 days horizon Small Pany Growth is expected to generate 0.92 times more return on investment than Amer Beacon. However, Small Pany Growth is 1.09 times less risky than Amer Beacon. It trades about 0.06 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.05 per unit of risk. If you would invest 748.00 in Small Pany Growth on September 2, 2024 and sell it today you would earn a total of 359.00 from holding Small Pany Growth or generate 47.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Pany Growth vs. Amer Beacon Ark
Performance |
| Timeline |
| Small Pany Growth |
| Amer Beacon Ark |
Small Pany and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Pany and Amer Beacon
The main advantage of trading using opposite Small Pany and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pany position performs unexpectedly, Amer 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Small Pany vs. Mid Cap Growth | Small Pany vs. Growth Portfolio Class | Small Pany vs. Morgan Stanley Multi | Small Pany vs. Emerging Markets Portfolio |
| Amer Beacon vs. Science Technology Fund | Amer Beacon vs. Technology Ultrasector Profund | Amer Beacon vs. Science Technology Fund | Amer Beacon vs. Biotechnology Fund Class |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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