Correlation Between American Funds and American Beacon
Can any of the company-specific risk be diversified away by investing in both American 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 American 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 American Funds Fundamental and American Beacon Mid Cap, you can compare the effects of market volatilities on American 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 American Funds with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and American Beacon.
Diversification Opportunities for American Funds and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and American Beacon Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Mid and American 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 American Funds Fundamental 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 Mid has no effect on the direction of American Funds i.e., American Funds and American Beacon go up and down completely randomly.
Pair Corralation between American Funds and American Beacon
If you would invest 6,564 in American Funds Fundamental on September 12, 2024 and sell it today you would earn a total of 2,246 from holding American Funds Fundamental or generate 34.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Funds Fundamental vs. American Beacon Mid Cap
Performance |
| Timeline |
| American Funds Funda |
| American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Funds and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and American Beacon
The main advantage of trading using opposite American Funds and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American 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.| American Funds vs. American Independence Kansas | American Funds vs. American Funds 2055 | American Funds vs. American Beacon Large | American Funds vs. American Beacon Ark |
| American Beacon vs. Fidelity Advisor Gold | American Beacon vs. Precious Metals And | American Beacon vs. Europac Gold Fund | American Beacon vs. Goldman Sachs Clean |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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