Correlation Between American Beacon and The Tocqueville
Can any of the company-specific risk be diversified away by investing in both American Beacon and The Tocqueville 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 The Tocqueville 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 The Tocqueville International, you can compare the effects of market volatilities on American Beacon and The Tocqueville 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 The Tocqueville. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and The Tocqueville.
Diversification Opportunities for American Beacon and The Tocqueville
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and The is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Stephens and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville Inte 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 The Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville Inte has no effect on the direction of American Beacon i.e., American Beacon and The Tocqueville go up and down completely randomly.
Pair Corralation between American Beacon and The Tocqueville
Assuming the 90 days horizon American Beacon Stephens is expected to generate 2.01 times more return on investment than The Tocqueville. However, American Beacon is 2.01 times more volatile than The Tocqueville International. It trades about 0.17 of its potential returns per unit of risk. The Tocqueville International is currently generating about -0.22 per unit of risk. If you would invest 1,552 in American Beacon Stephens on August 28, 2024 and sell it today you would earn a total of 138.00 from holding American Beacon Stephens or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Stephens vs. The Tocqueville International
Performance |
| Timeline |
| American Beacon Stephens |
| Tocqueville Inte |
American Beacon and The Tocqueville Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and The Tocqueville
The main advantage of trading using opposite American Beacon and The Tocqueville positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, The Tocqueville 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 The Tocqueville will offset losses from the drop in The Tocqueville's long position.| American Beacon vs. Western Asset Diversified | American Beacon vs. Huber Capital Diversified | American Beacon vs. Fidelity Advisor Diversified | American Beacon vs. Adams Diversified Equity |
| The Tocqueville vs. The Tocqueville Fund | The Tocqueville vs. Lazard International Small | The Tocqueville vs. Driehaus Emerging Markets | The Tocqueville vs. Columbia Emerging Markets |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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