Correlation Between American Beacon and Principal Midcap
Can any of the company-specific risk be diversified away by investing in both American Beacon and Principal Midcap 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 Principal Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Mid Cap and Principal Midcap Value, you can compare the effects of market volatilities on American Beacon and Principal Midcap 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 Principal Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Principal Midcap.
Diversification Opportunities for American Beacon and Principal Midcap
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Principal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Mid Cap and Principal Midcap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Midcap Value 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 Mid Cap are associated (or correlated) with Principal Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Midcap Value has no effect on the direction of American Beacon i.e., American Beacon and Principal Midcap go up and down completely randomly.
Pair Corralation between American Beacon and Principal Midcap
If you would invest (100.00) in American Beacon Mid Cap on January 27, 2024 and sell it today you would earn a total of 100.00 from holding American Beacon Mid Cap or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Beacon Mid Cap vs. Principal Midcap Value
Performance |
| Timeline |
| American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Principal Midcap Value |
American Beacon and Principal Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Principal Midcap
The main advantage of trading using opposite American Beacon and Principal Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Principal Midcap 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 Principal Midcap will offset losses from the drop in Principal Midcap's long position.| American Beacon vs. Commonwealth Global Fund | American Beacon vs. 361 Global Longshort | American Beacon vs. Legg Mason Global | American Beacon vs. Dreyfusstandish Global Fixed |
| Principal Midcap vs. Strategic Asset Management | Principal Midcap vs. Strategic Asset Management | Principal Midcap vs. Strategic Asset Management | Principal Midcap vs. Strategic Asset Management |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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