Correlation Between Pace Municipal and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Amer Beacon Garcia, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Amer Beacon.
Diversification Opportunities for Pace Municipal and Amer Beacon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Amer is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Amer Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Garcia and Pace Municipal 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 Pace Municipal Fixed 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 Garcia has no effect on the direction of Pace Municipal i.e., Pace Municipal and Amer Beacon go up and down completely randomly.
Pair Corralation between Pace Municipal and Amer Beacon
Assuming the 90 days horizon Pace Municipal is expected to generate 129.5 times less return on investment than Amer Beacon. But when comparing it to its historical volatility, Pace Municipal Fixed is 2.09 times less risky than Amer Beacon. It trades about 0.0 of its potential returns per unit of risk. Amer Beacon Garcia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 838.00 in Amer Beacon Garcia on November 5, 2024 and sell it today you would earn a total of 4.00 from holding Amer Beacon Garcia or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Amer Beacon Garcia
Performance |
| Timeline |
| Pace Municipal Fixed |
| Amer Beacon Garcia |
Pace Municipal and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Amer Beacon
The main advantage of trading using opposite Pace Municipal and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Nexpoint Real Estate | Pace Municipal vs. Texton Property | Pace Municipal vs. Amg Managers Centersquare | Pace Municipal vs. Real Estate Ultrasector |
| Amer Beacon vs. The Growth Equity | Amer Beacon vs. Smallcap World Fund | Amer Beacon vs. Gmo International Equity | Amer Beacon vs. Old Westbury Fixed |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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