Correlation Between Amer Beacon and Amer Beacon

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

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

Diversification Opportunities for Amer Beacon and Amer Beacon

-0.63

Correlation Coefficient

Amer Beacon  Amer Beacon

Excellent diversification

The 3 months correlation between Amer and Amer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Garcia and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark 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 Garcia are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Amer Beacon i.e., Amer Beacon and Amer Beacon go up and down completely randomly.

Pair Corralation between Amer Beacon and Amer Beacon

Assuming the 90 days horizon Amer Beacon Garcia is expected to generate 0.14 times more return on investment than Amer Beacon. However, Amer Beacon Garcia is 7.29 times less risky than Amer Beacon. It trades about 0.09 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about -0.05 per unit of risk. If you would invest  836.00  in Amer Beacon Garcia on December 28, 2024 and sell it today you would earn a total of  18.00  from holding Amer Beacon Garcia or generate 2.15% return on investment over 90 days.

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

Amer Beacon Garcia  vs.  Amer Beacon Ark

Amer Beacon Garcia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Beacon Garcia are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amer Beacon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amer Beacon Ark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amer Beacon Ark has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Amer Beacon and Amer Beacon

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

The idea behind Amer Beacon Garcia and Amer Beacon Ark 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.