Correlation Between American Beacon and Champlain Mid
Can any of the company-specific risk be diversified away by investing in both American Beacon and Champlain Mid 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 Champlain Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Stephens and Champlain Mid Cap, you can compare the effects of market volatilities on American Beacon and Champlain Mid 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 Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Champlain Mid.
Diversification Opportunities for American Beacon and Champlain Mid
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Champlain is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Stephens and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap 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 Stephens are associated (or correlated) with Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of American Beacon i.e., American Beacon and Champlain Mid go up and down completely randomly.
Pair Corralation between American Beacon and Champlain Mid
Assuming the 90 days horizon American Beacon Stephens is expected to generate 1.09 times more return on investment than Champlain Mid. However, American Beacon is 1.09 times more volatile than Champlain Mid Cap. It trades about 0.42 of its potential returns per unit of risk. Champlain Mid Cap is currently generating about 0.38 per unit of risk. If you would invest 3,085 in American Beacon Stephens on August 28, 2024 and sell it today you would earn a total of 304.00 from holding American Beacon Stephens or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Stephens vs. Champlain Mid Cap
Performance |
| Timeline |
| American Beacon Stephens |
| Champlain Mid Cap |
American Beacon and Champlain Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Champlain Mid
The main advantage of trading using opposite American Beacon and Champlain Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Champlain Mid 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 Champlain Mid will offset losses from the drop in Champlain Mid's long position.| American Beacon vs. American Beacon Stephens | American Beacon vs. American Beacon Stephens | American Beacon vs. American Beacon Stephens | American Beacon vs. American Beacon Stephens |
| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles Growth |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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