Correlation Between Vanguard Emerging and American Beacon
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and American Beacon Twentyfour, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and American Beacon.
Diversification Opportunities for Vanguard Emerging and American Beacon
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and American is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen and Vanguard Emerging 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 Emerging Markets 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 Twen has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and American Beacon go up and down completely randomly.
Pair Corralation between Vanguard Emerging and American Beacon
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 8.68 times more return on investment than American Beacon. However, Vanguard Emerging is 8.68 times more volatile than American Beacon Twentyfour. It trades about 0.05 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.27 per unit of risk. If you would invest 2,399 in Vanguard Emerging Markets on September 3, 2024 and sell it today you would earn a total of 482.00 from holding Vanguard Emerging Markets or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. American Beacon Twentyfour
Performance |
| Timeline |
| Vanguard Emerging Markets |
| American Beacon Twen |
Vanguard Emerging and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and American Beacon
The main advantage of trading using opposite Vanguard Emerging and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging 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.| Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. American Funds New |
| American Beacon vs. John Hancock Money | American Beacon vs. Transamerica Funds | American Beacon vs. Wells Fargo Funds | American Beacon vs. Lord Abbett Emerging |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |