Correlation Between American Beacon and Bny Mellon

Can any of the company-specific risk be diversified away by investing in both American Beacon and Bny Mellon 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 Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Beacon International and Bny Mellon Focused, you can compare the effects of market volatilities on American Beacon and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Bny Mellon.

Diversification Opportunities for American Beacon and Bny Mellon

-0.72

Correlation Coefficient

American Beacon  Bny Mellon

Pay attention - limited upside

The 3 months correlation between American and Bny is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon International and Bny Mellon Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Focused 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 International are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Focused has no effect on the direction of American Beacon i.e., American Beacon and Bny Mellon go up and down completely randomly.

Pair Corralation between American Beacon and Bny Mellon

If you would invest  1,437  in Bny Mellon Focused on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Bny Mellon Focused or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

American Beacon International  vs.  Bny Mellon Focused

American Beacon Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Beacon International has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Bny Mellon Focused

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Focused has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American Beacon and Bny Mellon

The main advantage of trading using opposite American Beacon and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.

The idea behind American Beacon International and Bny Mellon Focused pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.