Correlation Between M Large and American Beacon
Can any of the company-specific risk be diversified away by investing in both M Large 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 M Large and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and American Beacon Glg, you can compare the effects of market volatilities on M Large 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 M Large with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and American Beacon.
Diversification Opportunities for M Large and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MTCGX and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and American Beacon Glg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Glg and M Large 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 M Large Cap 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 Glg has no effect on the direction of M Large i.e., M Large and American Beacon go up and down completely randomly.
Pair Corralation between M Large and American Beacon
If you would invest 2,442 in M Large Cap on September 13, 2024 and sell it today you would earn a total of 1,315 from holding M Large Cap or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
M Large Cap vs. American Beacon Glg
Performance |
| Timeline |
| M Large Cap |
| American Beacon Glg |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
M Large and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and American Beacon
The main advantage of trading using opposite M Large and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.| M Large vs. Artisan Select Equity | M Large vs. Sarofim Equity | M Large vs. Huber Capital Equity | M Large vs. Touchstone International Equity |
| American Beacon vs. Great West Goldman Sachs | American Beacon vs. James Balanced Golden | American Beacon vs. Invesco Gold Special | American Beacon vs. Goldman Sachs Clean |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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