Correlation Between Wasatch Ultra and American Beacon
Can any of the company-specific risk be diversified away by investing in both Wasatch Ultra 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 Wasatch Ultra and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Ultra Growth and American Beacon Bridgeway, you can compare the effects of market volatilities on Wasatch Ultra 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 Wasatch Ultra with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Ultra and American Beacon.
Diversification Opportunities for Wasatch Ultra and American Beacon
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wasatch and American is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Ultra Growth and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway and Wasatch Ultra 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 Wasatch Ultra Growth 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 Bridgeway has no effect on the direction of Wasatch Ultra i.e., Wasatch Ultra and American Beacon go up and down completely randomly.
Pair Corralation between Wasatch Ultra and American Beacon
Assuming the 90 days horizon Wasatch Ultra is expected to generate 5.85 times less return on investment than American Beacon. In addition to that, Wasatch Ultra is 1.85 times more volatile than American Beacon Bridgeway. It trades about 0.02 of its total potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.16 per unit of volatility. If you would invest 2,458 in American Beacon Bridgeway on July 27, 2025 and sell it today you would earn a total of 183.00 from holding American Beacon Bridgeway or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Ultra Growth vs. American Beacon Bridgeway
Performance |
| Timeline |
| Wasatch Ultra Growth |
| American Beacon Bridgeway |
Wasatch Ultra and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Ultra and American Beacon
The main advantage of trading using opposite Wasatch Ultra and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Ultra 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.| Wasatch Ultra vs. Alger Smallcap Growth | Wasatch Ultra vs. Nationwide Highmark Small | Wasatch Ultra vs. Nationwide Highmark Small | Wasatch Ultra vs. Tweedy Browne Global |
| American Beacon vs. American Beacon Bridgeway | American Beacon vs. Alger Dynamic Opportunities | American Beacon vs. Crm Smallmid Cap | American Beacon vs. Internet Ultrasector Profund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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