Correlation Between American Beacon and American Beacon
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 Beacon 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 Beacon Stephens and American Beacon Small, you can compare the effects of market volatilities on American Beacon 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 Beacon with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and American Beacon.
Diversification Opportunities for American Beacon and American Beacon
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Stephens 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 American Beacon 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 Beacon Stephens 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 American Beacon i.e., American Beacon and American Beacon go up and down completely randomly.
Pair Corralation between American Beacon and American Beacon
Assuming the 90 days horizon American Beacon Stephens is expected to generate 0.65 times more return on investment than American Beacon. However, American Beacon Stephens is 1.54 times less risky than American Beacon. It trades about 0.38 of its potential returns per unit of risk. American Beacon Small is currently generating about 0.2 per unit of risk. If you would invest 3,858 in American Beacon Stephens on August 29, 2024 and sell it today you would earn a total of 357.00 from holding American Beacon Stephens or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Stephens vs. American Beacon Small
Performance |
| Timeline |
| American Beacon Stephens |
| American Beacon Small |
American Beacon and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and American Beacon
The main advantage of trading using opposite American Beacon and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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 Beacon vs. Small Cap Stock | American Beacon vs. Tiaa Cref Small Cap Blend | American Beacon vs. Jhancock Diversified Macro | American Beacon vs. Guggenheim Diversified Income |
| American Beacon vs. Kinetics Small Cap | American Beacon vs. Artisan Small Cap | American Beacon vs. Eip Growth And | American Beacon vs. Tfa Alphagen Growth |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets |