Correlation Between American Beacon and Virtus Multi-sector
Can any of the company-specific risk be diversified away by investing in both American Beacon and Virtus Multi-sector 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 Virtus Multi-sector into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Balanced and Virtus Multi Sector Short, you can compare the effects of market volatilities on American Beacon and Virtus Multi-sector 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 Virtus Multi-sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Virtus Multi-sector.
Diversification Opportunities for American Beacon and Virtus Multi-sector
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Virtus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Balanced and Virtus Multi Sector Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Sector 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 Balanced are associated (or correlated) with Virtus Multi-sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Multi Sector has no effect on the direction of American Beacon i.e., American Beacon and Virtus Multi-sector go up and down completely randomly.
Pair Corralation between American Beacon and Virtus Multi-sector
Assuming the 90 days horizon American Beacon is expected to generate 2.86 times less return on investment than Virtus Multi-sector. In addition to that, American Beacon is 3.29 times more volatile than Virtus Multi Sector Short. It trades about 0.02 of its total potential returns per unit of risk. Virtus Multi Sector Short is currently generating about 0.18 per unit of volatility. If you would invest 448.00 in Virtus Multi Sector Short on December 29, 2024 and sell it today you would earn a total of 8.00 from holding Virtus Multi Sector Short or generate 1.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
American Beacon Balanced vs. Virtus Multi Sector Short
Performance |
Timeline |
American Beacon Balanced |
Virtus Multi Sector |
American Beacon and Virtus Multi-sector Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and Virtus Multi-sector
The main advantage of trading using opposite American Beacon and Virtus Multi-sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Virtus Multi-sector 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 Virtus Multi-sector will offset losses from the drop in Virtus Multi-sector's long position.American Beacon vs. Oklahoma College Savings | American Beacon vs. Multimanager Lifestyle Moderate | American Beacon vs. Saat Moderate Strategy | American Beacon vs. John Hancock Funds |
Virtus Multi-sector vs. Touchstone Large Cap | Virtus Multi-sector vs. Tiaa Cref Large Cap Value | Virtus Multi-sector vs. Virtus Nfj Large Cap | Virtus Multi-sector vs. Cb Large Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |