Correlation Between NYSE Composite and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Amer Beacon Ark, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Amer Beacon.
Diversification Opportunities for NYSE Composite and Amer Beacon
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Amer is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Amer Beacon go up and down completely randomly.
Pair Corralation between NYSE Composite and Amer Beacon
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.98 times less return on investment than Amer Beacon. But when comparing it to its historical volatility, NYSE Composite is 3.34 times less risky than Amer Beacon. It trades about 0.08 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Amer Beacon Ark on November 28, 2024 and sell it today you would earn a total of 358.00 from holding Amer Beacon Ark or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Amer Beacon Ark
Performance |
| Timeline |
NYSE Composite and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Amer Beacon Ark
Pair trading matchups for Amer Beacon
Pair Trading with NYSE Composite and Amer Beacon
The main advantage of trading using opposite NYSE Composite and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| Amer Beacon vs. Allianzgi Technology Fund | Amer Beacon vs. Pgim Jennison Technology | Amer Beacon vs. Baron Select Funds | Amer Beacon vs. T Rowe Price |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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