Correlation Between Pace Municipal and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and American 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 American Beacon The, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and American Beacon.
Diversification Opportunities for Pace Municipal and American Beacon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pace and American is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and American Beacon The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon 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 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 has no effect on the direction of Pace Municipal i.e., Pace Municipal and American Beacon go up and down completely randomly.
Pair Corralation between Pace Municipal and American Beacon
Assuming the 90 days horizon Pace Municipal is expected to generate 3.34 times less return on investment than American Beacon. But when comparing it to its historical volatility, Pace Municipal Fixed is 4.03 times less risky than American Beacon. It trades about 0.07 of its potential returns per unit of risk. American Beacon The is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,054 in American Beacon The on August 30, 2024 and sell it today you would earn a total of 415.00 from holding American Beacon The or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. American Beacon The
Performance |
| Timeline |
| Pace Municipal Fixed |
| American Beacon |
Pace Municipal and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and American Beacon
The main advantage of trading using opposite Pace Municipal and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Legg Mason Partners | Pace Municipal vs. Artisan Emerging Markets | Pace Municipal vs. Touchstone Sands Capital | Pace Municipal vs. T Rowe Price |
| American Beacon vs. Goldman Sachs Mlp | American Beacon vs. Clearbridge Energy Mlp | American Beacon vs. Ivy Natural Resources | American Beacon vs. Gamco Natural Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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