Correlation Between Pacific Funds and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pacific Funds 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 Pacific Funds and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Small Cap and American Beacon Small, you can compare the effects of market volatilities on Pacific Funds 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 Pacific Funds with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and American Beacon.
Diversification Opportunities for Pacific Funds and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pacific and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Small Cap and American Beacon Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Small and Pacific Funds 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 Pacific Funds Small 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 Small has no effect on the direction of Pacific Funds i.e., Pacific Funds and American Beacon go up and down completely randomly.
Pair Corralation between Pacific Funds and American Beacon
If you would invest 1,002 in Pacific Funds Small Cap on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Pacific Funds Small Cap or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Pacific Funds Small Cap vs. American Beacon Small
Performance |
| Timeline |
| Pacific Funds Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Beacon Small |
Pacific Funds and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Funds and American Beacon
The main advantage of trading using opposite Pacific Funds and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds 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.| Pacific Funds vs. Siit High Yield | Pacific Funds vs. Pace High Yield | Pacific Funds vs. Needham Aggressive Growth | Pacific Funds vs. Victory High Income |
| American Beacon vs. Vanguard Total Stock | American Beacon vs. Vanguard 500 Index | American Beacon vs. Vanguard Total Stock | American Beacon vs. Vanguard Total Stock |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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