Correlation Between Ssga International and American Beacon
Can any of the company-specific risk be diversified away by investing in both Ssga International 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 Ssga International and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssga International Stock and American Beacon International, you can compare the effects of market volatilities on Ssga International 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 Ssga International with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and American Beacon.
Diversification Opportunities for Ssga International and American Beacon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ssga and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and American Beacon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Inte and Ssga International 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 Ssga International Stock 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 Inte has no effect on the direction of Ssga International i.e., Ssga International and American Beacon go up and down completely randomly.
Pair Corralation between Ssga International and American Beacon
Assuming the 90 days horizon Ssga International Stock is expected to generate 1.04 times more return on investment than American Beacon. However, Ssga International is 1.04 times more volatile than American Beacon International. It trades about -0.01 of its potential returns per unit of risk. American Beacon International is currently generating about -0.03 per unit of risk. If you would invest 1,157 in Ssga International Stock on August 29, 2024 and sell it today you would lose (25.00) from holding Ssga International Stock or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssga International Stock vs. American Beacon International
Performance |
| Timeline |
| Ssga International Stock |
| American Beacon Inte |
Ssga International and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssga International and American Beacon
The main advantage of trading using opposite Ssga International and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssga International 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.| Ssga International vs. HUMANA INC | Ssga International vs. Aquagold International | Ssga International vs. Barloworld Ltd ADR | Ssga International vs. Morningstar Unconstrained Allocation |
| American Beacon vs. American Beacon Large | American Beacon vs. Large Pany Value | American Beacon vs. American Beacon Balanced | American Beacon vs. American Beacon Small |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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