Correlation Between Amer Beacon and Mh Elite

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

By analyzing existing cross correlation between Amer Beacon Ark and Mh Elite Small, you can compare the effects of market volatilities on Amer Beacon and Mh Elite 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 Amer Beacon with a short position of Mh Elite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Beacon and Mh Elite.

Diversification Opportunities for Amer Beacon and Mh Elite

0.62

Correlation Coefficient

Amer Beacon  Mh Elite

Poor diversification

The 3 months correlation between Amer and MHELX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Ark and Mh Elite Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Small and Amer 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 Amer Beacon Ark are associated (or correlated) with Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Small has no effect on the direction of Amer Beacon i.e., Amer Beacon and Mh Elite go up and down completely randomly.

Pair Corralation between Amer Beacon and Mh Elite

Assuming the 90 days horizon Amer Beacon Ark is expected to generate 2.08 times more return on investment than Mh Elite. However, Amer Beacon is 2.08 times more volatile than Mh Elite Small. It trades about -0.06 of its potential returns per unit of risk. Mh Elite Small is currently generating about -0.14 per unit of risk. If you would invest  1,673  in Amer Beacon Ark on October 10, 2024 and sell it today you would lose (65.00) from holding Amer Beacon Ark or give up 3.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Amer Beacon Ark  vs.  Mh Elite Small

Amer Beacon Ark

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Beacon Ark are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amer Beacon showed solid returns over the last few months and may actually be approaching a breakup point.

Mh Elite Small

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mh Elite Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Mh Elite is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amer Beacon and Mh Elite

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

The idea behind Amer Beacon Ark and Mh Elite Small 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.