Correlation Between The Gold and American Beacon
Can any of the company-specific risk be diversified away by investing in both The Gold 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 The Gold and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bullion and American Beacon Stephens, you can compare the effects of market volatilities on The Gold 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 The Gold with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gold and American Beacon.
Diversification Opportunities for The Gold and American Beacon
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bullion and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens and The Gold 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 The Gold Bullion 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 Stephens has no effect on the direction of The Gold i.e., The Gold and American Beacon go up and down completely randomly.
Pair Corralation between The Gold and American Beacon
Assuming the 90 days horizon The Gold is expected to generate 9.82 times less return on investment than American Beacon. In addition to that, The Gold is 1.02 times more volatile than American Beacon Stephens. It trades about 0.01 of its total potential returns per unit of risk. American Beacon Stephens is currently generating about 0.08 per unit of volatility. If you would invest 3,847 in American Beacon Stephens on October 25, 2024 and sell it today you would earn a total of 199.00 from holding American Beacon Stephens or generate 5.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Gold Bullion vs. American Beacon Stephens
Performance |
Timeline |
Gold Bullion |
American Beacon Stephens |
The Gold and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with The Gold and American Beacon
The main advantage of trading using opposite The Gold and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gold 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.The Gold vs. Schwab Government Money | ||
The Gold vs. Elfun Government Money | ||
The Gold vs. Edward Jones Money | ||
The Gold vs. Hewitt Money Market |
American Beacon vs. Lsv Small Cap | ||
American Beacon vs. Small Cap Value | ||
American Beacon vs. Ultrasmall Cap Profund Ultrasmall Cap | ||
American Beacon vs. Ab Small 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Stocks Directory Find actively traded stocks across global markets | |
CEOs Directory Screen CEOs from public companies around the world | |
Transaction History View history of all your transactions and understand their impact on performance |