Correlation Between Tocqueville International and American Beacon
Can any of the company-specific risk be diversified away by investing in both Tocqueville International 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 Tocqueville International 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 Tocqueville International and American Beacon Ssi, you can compare the effects of market volatilities on Tocqueville International 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 Tocqueville International with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tocqueville International and American Beacon.
Diversification Opportunities for Tocqueville International and American Beacon
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tocqueville and American is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Tocqueville International and American Beacon Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ssi and Tocqueville International 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 Tocqueville International 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 Ssi has no effect on the direction of Tocqueville International i.e., Tocqueville International and American Beacon go up and down completely randomly.
Pair Corralation between Tocqueville International and American Beacon
Assuming the 90 days horizon The Tocqueville International is expected to generate 5.84 times more return on investment than American Beacon. However, Tocqueville International is 5.84 times more volatile than American Beacon Ssi. It trades about 0.16 of its potential returns per unit of risk. American Beacon Ssi is currently generating about 0.13 per unit of risk. If you would invest 1,751 in The Tocqueville International on September 16, 2024 and sell it today you would earn a total of 39.00 from holding The Tocqueville International or generate 2.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Tocqueville International vs. American Beacon Ssi
Performance |
Timeline |
Tocqueville International |
American Beacon Ssi |
Tocqueville International and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tocqueville International and American Beacon
The main advantage of trading using opposite Tocqueville International and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tocqueville International 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 idea behind The Tocqueville International and American Beacon Ssi 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.
American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour | American Beacon vs. American Beacon Twentyfour |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Commodity Directory Find actively traded commodities issued by global exchanges |