Correlation Between American Beacon and Sit International
Can any of the company-specific risk be diversified away by investing in both American Beacon and Sit International 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 Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Small and Sit International Equity, you can compare the effects of market volatilities on American Beacon and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Sit International.
Diversification Opportunities for American Beacon and Sit International
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Sit is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity 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 Small are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of American Beacon i.e., American Beacon and Sit International go up and down completely randomly.
Pair Corralation between American Beacon and Sit International
Assuming the 90 days horizon American Beacon is expected to generate 65.1 times less return on investment than Sit International. In addition to that, American Beacon is 1.84 times more volatile than Sit International Equity. It trades about 0.0 of its total potential returns per unit of risk. Sit International Equity is currently generating about 0.1 per unit of volatility. If you would invest 1,406 in Sit International Equity on August 19, 2025 and sell it today you would earn a total of 58.00 from holding Sit International Equity or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Small vs. Sit International Equity
Performance |
| Timeline |
| American Beacon Small |
| Sit International Equity |
American Beacon and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Sit International
The main advantage of trading using opposite American Beacon and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| American Beacon vs. American Beacon Small | American Beacon vs. American Beacon Small | American Beacon vs. Sit International Equity | American Beacon vs. American Beacon Large |
| Sit International vs. American Beacon Small | Sit International vs. American Beacon Small | Sit International vs. American Beacon Small | Sit International vs. Wells Fargo Emerging |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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