Correlation Between Balanced Fund and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Amer Beacon Garcia, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Amer Beacon.
Diversification Opportunities for Balanced Fund and Amer Beacon
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balanced and Amer is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Amer Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Garcia and Balanced Fund 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 Balanced Fund Investor 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 Garcia has no effect on the direction of Balanced Fund i.e., Balanced Fund and Amer Beacon go up and down completely randomly.
Pair Corralation between Balanced Fund and Amer Beacon
Assuming the 90 days horizon Balanced Fund Investor is expected to under-perform the Amer Beacon. In addition to that, Balanced Fund is 1.61 times more volatile than Amer Beacon Garcia. It trades about -0.09 of its total potential returns per unit of risk. Amer Beacon Garcia is currently generating about 0.12 per unit of volatility. If you would invest 834.00 in Amer Beacon Garcia on December 28, 2024 and sell it today you would earn a total of 24.00 from holding Amer Beacon Garcia or generate 2.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Balanced Fund Investor vs. Amer Beacon Garcia
Performance |
Timeline |
Balanced Fund Investor |
Amer Beacon Garcia |
Balanced Fund and Amer Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Balanced Fund and Amer Beacon
The main advantage of trading using opposite Balanced Fund and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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