Correlation Between American Beacon and Ffcdax
Can any of the company-specific risk be diversified away by investing in both American Beacon and Ffcdax 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 Ffcdax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Twentyfour and Ffcdax, you can compare the effects of market volatilities on American Beacon and Ffcdax 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 Ffcdax. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Ffcdax.
Diversification Opportunities for American Beacon and Ffcdax
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Ffcdax is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Twentyfour and Ffcdax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ffcdax 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 Twentyfour are associated (or correlated) with Ffcdax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ffcdax has no effect on the direction of American Beacon i.e., American Beacon and Ffcdax go up and down completely randomly.
Pair Corralation between American Beacon and Ffcdax
Assuming the 90 days horizon American Beacon Twentyfour is expected to generate 0.41 times more return on investment than Ffcdax. However, American Beacon Twentyfour is 2.43 times less risky than Ffcdax. It trades about 0.25 of its potential returns per unit of risk. Ffcdax is currently generating about 0.05 per unit of risk. If you would invest 827.00 in American Beacon Twentyfour on November 7, 2024 and sell it today you would earn a total of 40.00 from holding American Beacon Twentyfour or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.68% |
| Values | Daily Returns |
American Beacon Twentyfour vs. Ffcdax
Performance |
| Timeline |
| American Beacon Twen |
| Ffcdax |
American Beacon and Ffcdax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Ffcdax
The main advantage of trading using opposite American Beacon and Ffcdax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Ffcdax 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 Ffcdax will offset losses from the drop in Ffcdax's long position.| American Beacon vs. Rationalpier 88 Convertible | American Beacon vs. Absolute Convertible Arbitrage | American Beacon vs. Advent Claymore Convertible | American Beacon vs. Lord Abbett Convertible |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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