Correlation Between Pia High and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pia High 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 Pia High and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pia High Yield and American Beacon Garcia, you can compare the effects of market volatilities on Pia High 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 Pia High with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pia High and American Beacon.
Diversification Opportunities for Pia High and American Beacon
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pia and American is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pia High Yield and American Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Garcia and Pia High 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 Pia High Yield 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 Garcia has no effect on the direction of Pia High i.e., Pia High and American Beacon go up and down completely randomly.
Pair Corralation between Pia High and American Beacon
Assuming the 90 days horizon Pia High Yield is expected to generate 0.37 times more return on investment than American Beacon. However, Pia High Yield is 2.71 times less risky than American Beacon. It trades about 0.23 of its potential returns per unit of risk. American Beacon Garcia is currently generating about 0.03 per unit of risk. If you would invest 786.00 in Pia High Yield on August 26, 2024 and sell it today you would earn a total of 126.00 from holding Pia High Yield or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pia High Yield vs. American Beacon Garcia
Performance |
| Timeline |
| Pia High Yield |
| American Beacon Garcia |
Pia High and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pia High and American Beacon
The main advantage of trading using opposite Pia High and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pia High 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.| Pia High vs. Pia Short Term Securities | Pia High vs. Pia High Yield | Pia High vs. Pia Bbb Bond | Pia High vs. Small Cap Core |
| American Beacon vs. Siit High Yield | American Beacon vs. Pia High Yield | American Beacon vs. Pace High Yield | American Beacon vs. Fidelity Capital Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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