Correlation Between Emerging Markets and American Beacon
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Leaders and American Beacon Mid Cap, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and American Beacon.
Diversification Opportunities for Emerging Markets and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerging and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Leaders and American Beacon Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Mid and Emerging Markets 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 Emerging Markets Leaders 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 Mid has no effect on the direction of Emerging Markets i.e., Emerging Markets and American Beacon go up and down completely randomly.
Pair Corralation between Emerging Markets and American Beacon
If you would invest (100.00) in American Beacon Mid Cap on January 20, 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 |
Emerging Markets Leaders vs. American Beacon Mid Cap
Performance |
| Timeline |
| Emerging Markets Leaders |
| American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emerging Markets and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and American Beacon
The main advantage of trading using opposite Emerging Markets and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Vanguard Emerging Markets | Emerging Markets vs. American Funds New | Emerging Markets vs. American Funds New | Emerging Markets vs. New World Fund |
| American Beacon vs. Precious Metals And | American Beacon vs. Franklin Gold Precious | American Beacon vs. Global Gold Fund | American Beacon vs. James Balanced Golden |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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