Correlation Between Vanguard Total and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Amer 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 Vanguard Total and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Amer Beacon Garcia, you can compare the effects of market volatilities on Vanguard Total and Amer 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 Vanguard Total with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Amer Beacon.
Diversification Opportunities for Vanguard Total and Amer Beacon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Amer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Amer Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Garcia and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Garcia has no effect on the direction of Vanguard Total i.e., Vanguard Total and Amer Beacon go up and down completely randomly.
Pair Corralation between Vanguard Total and Amer Beacon
Assuming the 90 days horizon Vanguard Total Bond is expected to generate 1.01 times more return on investment than Amer Beacon. However, Vanguard Total is 1.01 times more volatile than Amer Beacon Garcia. It trades about -0.03 of its potential returns per unit of risk. Amer Beacon Garcia is currently generating about -0.05 per unit of risk. If you would invest 958.00 in Vanguard Total Bond on August 28, 2024 and sell it today you would lose (3.00) from holding Vanguard Total Bond or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Total Bond vs. Amer Beacon Garcia
Performance |
| Timeline |
| Vanguard Total Bond |
| Amer Beacon Garcia |
Vanguard Total and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Amer Beacon
The main advantage of trading using opposite Vanguard Total and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Amer 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard 500 Index |
| Amer Beacon vs. American Beacon Ssi | Amer Beacon vs. American Beacon Bridgeway | Amer Beacon vs. American Beacon Bridgeway | Amer 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |