Correlation Between American Beacon and Ab Global
Can any of the company-specific risk be diversified away by investing in both American Beacon and Ab Global 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 Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ssi and Ab Global Risk, you can compare the effects of market volatilities on American Beacon and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Ab Global.
Diversification Opportunities for American Beacon and Ab Global
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and CABIX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ssi and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk 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 Ssi are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of American Beacon i.e., American Beacon and Ab Global go up and down completely randomly.
Pair Corralation between American Beacon and Ab Global
Assuming the 90 days horizon American Beacon Ssi is expected to generate 0.11 times more return on investment than Ab Global. However, American Beacon Ssi is 8.86 times less risky than Ab Global. It trades about 0.69 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.06 per unit of risk. If you would invest 1,001 in American Beacon Ssi on December 1, 2024 and sell it today you would earn a total of 7.00 from holding American Beacon Ssi or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Ssi vs. Ab Global Risk
Performance |
| Timeline |
| American Beacon Ssi |
| Ab Global Risk |
American Beacon and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Ab Global
The main advantage of trading using opposite American Beacon and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| American Beacon vs. Palmer Square Ssi | American Beacon vs. Ontrack E Fund | American Beacon vs. Westwood Market Neutral | American Beacon vs. Jpmorgan Research Market |
| Ab Global vs. Principal Lifetime Hybrid | Ab Global vs. Washington Mutual Investors | Ab Global vs. Balanced Allocation Fund | Ab Global vs. Enhanced Large Pany |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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