Correlation Between Hunter Small and American Beacon
Can any of the company-specific risk be diversified away by investing in both Hunter Small and American 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 Hunter Small and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunter Small Cap and American Beacon Small, you can compare the effects of market volatilities on Hunter Small and American 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 Hunter Small with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Small and American Beacon.
Diversification Opportunities for Hunter Small and American Beacon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hunter and American is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and American Beacon Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Small and Hunter Small 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 Hunter Small Cap are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Small has no effect on the direction of Hunter Small i.e., Hunter Small and American Beacon go up and down completely randomly.
Pair Corralation between Hunter Small and American Beacon
Assuming the 90 days horizon Hunter Small Cap is expected to generate 0.73 times more return on investment than American Beacon. However, Hunter Small Cap is 1.36 times less risky than American Beacon. It trades about 0.02 of its potential returns per unit of risk. American Beacon Small is currently generating about -0.02 per unit of risk. If you would invest 1,277 in Hunter Small Cap on October 24, 2024 and sell it today you would earn a total of 13.00 from holding Hunter Small Cap or generate 1.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hunter Small Cap vs. American Beacon Small
Performance |
Timeline |
Hunter Small Cap |
American Beacon Small |
Hunter Small and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hunter Small and American Beacon
The main advantage of trading using opposite Hunter Small and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Small position performs unexpectedly, American 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 American Beacon will offset losses from the drop in American Beacon's long position.Hunter Small vs. Qs Global Equity | Hunter Small vs. Gmo Global Equity | Hunter Small vs. Kinetics Global Fund | Hunter Small vs. Morningstar Global Income |
American Beacon vs. Cmg Ultra Short | American Beacon vs. Baird Short Term Bond | American Beacon vs. Aqr Sustainable Long Short | American Beacon vs. Angel Oak Ultrashort |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |