Correlation Between American Beacon and Dreyfusthe Boston

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

By analyzing existing cross correlation between American Beacon Stephens and Dreyfusthe Boston Pany, you can compare the effects of market volatilities on American Beacon and Dreyfusthe Boston 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 Dreyfusthe Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Dreyfusthe Boston.

Diversification Opportunities for American Beacon and Dreyfusthe Boston

0.55

Correlation Coefficient

American Beacon  Dreyfusthe Boston

Very weak diversification

The 3 months correlation between American and Dreyfusthe is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Stephens and Dreyfusthe Boston Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusthe Boston Pany 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 Stephens are associated (or correlated) with Dreyfusthe Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusthe Boston Pany has no effect on the direction of American Beacon i.e., American Beacon and Dreyfusthe Boston go up and down completely randomly.

Pair Corralation between American Beacon and Dreyfusthe Boston

Assuming the 90 days horizon American Beacon Stephens is expected to under-perform the Dreyfusthe Boston. In addition to that, American Beacon is 1.08 times more volatile than Dreyfusthe Boston Pany. It trades about -0.05 of its total potential returns per unit of risk. Dreyfusthe Boston Pany is currently generating about 0.11 per unit of volatility. If you would invest  3,847  in Dreyfusthe Boston Pany on October 12, 2024 and sell it today you would earn a total of  322.00  from holding Dreyfusthe Boston Pany or generate 8.37% return on investment over 90 days.

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

American Beacon Stephens  vs.  Dreyfusthe Boston Pany

American Beacon Stephens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Beacon Stephens has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, American Beacon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfusthe Boston Pany

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfusthe Boston Pany are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dreyfusthe Boston may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with American Beacon and Dreyfusthe Boston

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

The idea behind American Beacon Stephens and Dreyfusthe Boston Pany 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.