Correlation Between American Beacon and Nuveen Real
Can any of the company-specific risk be diversified away by investing in both American Beacon and Nuveen Real 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 Nuveen Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Bridgeway and Nuveen Real Estate, you can compare the effects of market volatilities on American Beacon and Nuveen Real 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 Nuveen Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Nuveen Real.
Diversification Opportunities for American Beacon and Nuveen Real
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Nuveen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Bridgeway and Nuveen Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Real Estate 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 Bridgeway are associated (or correlated) with Nuveen Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Real Estate has no effect on the direction of American Beacon i.e., American Beacon and Nuveen Real go up and down completely randomly.
Pair Corralation between American Beacon and Nuveen Real
Assuming the 90 days horizon American Beacon Bridgeway is expected to under-perform the Nuveen Real. In addition to that, American Beacon is 2.09 times more volatile than Nuveen Real Estate. It trades about -0.35 of its total potential returns per unit of risk. Nuveen Real Estate is currently generating about -0.42 per unit of volatility. If you would invest 1,710 in Nuveen Real Estate on September 24, 2024 and sell it today you would lose (206.00) from holding Nuveen Real Estate or give up 12.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
American Beacon Bridgeway vs. Nuveen Real Estate
Performance |
Timeline |
American Beacon Bridgeway |
Nuveen Real Estate |
American Beacon and Nuveen Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and Nuveen Real
The main advantage of trading using opposite American Beacon and Nuveen Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Nuveen Real 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 Nuveen Real will offset losses from the drop in Nuveen Real's long position.American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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