Correlation Between Amg Managers and American Beacon
Can any of the company-specific risk be diversified away by investing in both Amg Managers 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 Amg Managers and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Managers Skyline and American Beacon Bridgeway, you can compare the effects of market volatilities on Amg Managers 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 Amg Managers with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and American Beacon.
Diversification Opportunities for Amg Managers and American Beacon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Skyline and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway and Amg Managers 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 Amg Managers Skyline 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 Bridgeway has no effect on the direction of Amg Managers i.e., Amg Managers and American Beacon go up and down completely randomly.
Pair Corralation between Amg Managers and American Beacon
Assuming the 90 days horizon Amg Managers Skyline is expected to generate 1.32 times more return on investment than American Beacon. However, Amg Managers is 1.32 times more volatile than American Beacon Bridgeway. It trades about 0.05 of its potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.04 per unit of risk. If you would invest 2,700 in Amg Managers Skyline on August 26, 2024 and sell it today you would earn a total of 762.00 from holding Amg Managers Skyline or generate 28.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Managers Skyline vs. American Beacon Bridgeway
Performance |
| Timeline |
| Amg Managers Skyline |
| American Beacon Bridgeway |
Amg Managers and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Managers and American Beacon
The main advantage of trading using opposite Amg Managers and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers 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.| Amg Managers vs. American Beacon Bridgeway | Amg Managers vs. John Hancock Disciplined | Amg Managers vs. Large Cap Fund | Amg Managers vs. Baird E Plus |
| American Beacon vs. Amg Managers Skyline | American Beacon vs. The Hartford International | American Beacon vs. Baird E Plus | American Beacon vs. Artisan Developing World |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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