Correlation Between Simt Managed and American Beacon

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

By analyzing existing cross correlation between Simt Managed Volatility and American Beacon International, you can compare the effects of market volatilities on Simt Managed 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 Simt Managed with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Managed and American Beacon.

Diversification Opportunities for Simt Managed and American Beacon

-0.22

Correlation Coefficient

Simt Managed  American Beacon

Very good diversification

The 3 months correlation between Simt and American is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Simt Managed Volatility and American Beacon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Inte and Simt Managed 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 Simt Managed Volatility 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 Inte has no effect on the direction of Simt Managed i.e., Simt Managed and American Beacon go up and down completely randomly.

Pair Corralation between Simt Managed and American Beacon

Assuming the 90 days horizon Simt Managed Volatility is expected to under-perform the American Beacon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Simt Managed Volatility is 1.7 times less risky than American Beacon. The mutual fund trades about -0.08 of its potential returns per unit of risk. The American Beacon International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,763  in American Beacon International on September 9, 2025 and sell it today you would earn a total of  92.00  from holding American Beacon International or generate 5.22% return on investment over 90 days.

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

Simt Managed Volatility  vs.  American Beacon International

Simt Managed Volatility

Risk-Adjusted Performance

Weakest

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

American Beacon Inte

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in American Beacon International are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, American Beacon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Managed and American Beacon

The main advantage of trading using opposite Simt Managed and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Managed 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 Simt Managed Volatility and American Beacon International 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.