Correlation Between Pimco International and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pimco International 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 Pimco International and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Stocksplus and American Beacon Global, you can compare the effects of market volatilities on Pimco International 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 Pimco International with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and American Beacon.
Diversification Opportunities for Pimco International and American Beacon
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pimco and American is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and American Beacon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Global and Pimco International 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 Pimco International Stocksplus 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 Global has no effect on the direction of Pimco International i.e., Pimco International and American Beacon go up and down completely randomly.
Pair Corralation between Pimco International and American Beacon
Assuming the 90 days horizon Pimco International Stocksplus is expected to under-perform the American Beacon. In addition to that, Pimco International is 3.49 times more volatile than American Beacon Global. It trades about -0.02 of its total potential returns per unit of risk. American Beacon Global is currently generating about 0.34 per unit of volatility. If you would invest 702.00 in American Beacon Global on August 25, 2024 and sell it today you would earn a total of 9.00 from holding American Beacon Global or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Stocksplus vs. American Beacon Global
Performance |
| Timeline |
| Pimco International |
| American Beacon Global |
Pimco International and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and American Beacon
The main advantage of trading using opposite Pimco International and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International 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.| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Allianzgi Nfj Mid Cap |
| American Beacon vs. Sit Emerging Markets | American Beacon vs. HUMANA INC | American Beacon vs. Aquagold International | American Beacon vs. Barloworld Ltd ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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