Correlation Between Tfa Alphagen and American Beacon
Can any of the company-specific risk be diversified away by investing in both Tfa Alphagen 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 Tfa Alphagen and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tfa Alphagen Growth and American Beacon Shapiro, you can compare the effects of market volatilities on Tfa Alphagen 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 Tfa Alphagen with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tfa Alphagen and American Beacon.
Diversification Opportunities for Tfa Alphagen and American Beacon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tfa and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tfa Alphagen Growth and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro and Tfa Alphagen 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 Tfa Alphagen Growth 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 Shapiro has no effect on the direction of Tfa Alphagen i.e., Tfa Alphagen and American Beacon go up and down completely randomly.
Pair Corralation between Tfa Alphagen and American Beacon
Assuming the 90 days horizon Tfa Alphagen Growth is expected to generate 0.95 times more return on investment than American Beacon. However, Tfa Alphagen Growth is 1.06 times less risky than American Beacon. It trades about 0.16 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about -0.09 per unit of risk. If you would invest 1,120 in Tfa Alphagen Growth on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Tfa Alphagen Growth or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tfa Alphagen Growth vs. American Beacon Shapiro
Performance |
| Timeline |
| Tfa Alphagen Growth |
| American Beacon Shapiro |
Tfa Alphagen and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tfa Alphagen and American Beacon
The main advantage of trading using opposite Tfa Alphagen and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tfa Alphagen 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.| Tfa Alphagen vs. Ab Global Risk | Tfa Alphagen vs. Ab Global Risk | Tfa Alphagen vs. T Rowe Price | Tfa Alphagen vs. Pace High Yield |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
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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