Correlation Between American Beacon and Transam Short-term
Can any of the company-specific risk be diversified away by investing in both American Beacon and Transam Short-term 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 Transam Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Shapiro and Transam Short Term Bond, you can compare the effects of market volatilities on American Beacon and Transam Short-term 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 Transam Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Transam Short-term.
Diversification Opportunities for American Beacon and Transam Short-term
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Transam is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Shapiro and Transam Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transam Short Term 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 Shapiro are associated (or correlated) with Transam Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transam Short Term has no effect on the direction of American Beacon i.e., American Beacon and Transam Short-term go up and down completely randomly.
Pair Corralation between American Beacon and Transam Short-term
Assuming the 90 days horizon American Beacon Shapiro is expected to generate 6.99 times more return on investment than Transam Short-term. However, American Beacon is 6.99 times more volatile than Transam Short Term Bond. It trades about 0.06 of its potential returns per unit of risk. Transam Short Term Bond is currently generating about 0.09 per unit of risk. If you would invest 1,356 in American Beacon Shapiro on November 3, 2024 and sell it today you would earn a total of 81.00 from holding American Beacon Shapiro or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Shapiro vs. Transam Short Term Bond
Performance |
| Timeline |
| American Beacon Shapiro |
| Transam Short Term |
American Beacon and Transam Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Transam Short-term
The main advantage of trading using opposite American Beacon and Transam Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Transam Short-term 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 Transam Short-term will offset losses from the drop in Transam Short-term's long position.| American Beacon vs. Furyax | American Beacon vs. Rbb Fund | American Beacon vs. Fbjygx | American Beacon vs. Flakqx |
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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 Stocks Directory module to find actively traded stocks across global markets.
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