Correlation Between Siit Global and American Beacon
Can any of the company-specific risk be diversified away by investing in both Siit Global 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 Siit Global and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Global Managed and American Beacon Stephens, you can compare the effects of market volatilities on Siit Global 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 Siit Global with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Global and American Beacon.
Diversification Opportunities for Siit Global and American Beacon
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siit and American is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Siit Global Managed and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens and Siit Global 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 Siit Global Managed 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 Stephens has no effect on the direction of Siit Global i.e., Siit Global and American Beacon go up and down completely randomly.
Pair Corralation between Siit Global and American Beacon
Assuming the 90 days horizon Siit Global Managed is expected to generate 0.29 times more return on investment than American Beacon. However, Siit Global Managed is 3.46 times less risky than American Beacon. It trades about -0.02 of its potential returns per unit of risk. American Beacon Stephens is currently generating about -0.2 per unit of risk. If you would invest 1,170 in Siit Global Managed on January 5, 2025 and sell it today you would lose (3.00) from holding Siit Global Managed or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Siit Global Managed vs. American Beacon Stephens
Performance |
| Timeline |
| Siit Global Managed |
| American Beacon Stephens |
Siit Global and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Global and American Beacon
The main advantage of trading using opposite Siit Global and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Global 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.| Siit Global vs. Dws Government Money | Siit Global vs. Franklin Government Money | Siit Global vs. Fidelity Government Money | Siit Global vs. Putnam Money Market |
| American Beacon vs. Putnam Global Health | American Beacon vs. Highland Longshort Healthcare | American Beacon vs. Deutsche Health And | American Beacon vs. Fidelity Advisor Health |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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