Correlation Between Ab Impact and Anchor Risk
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Anchor Risk 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 Ab Impact and Anchor Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Anchor Risk Managed, you can compare the effects of market volatilities on Ab Impact and Anchor Risk 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 Ab Impact with a short position of Anchor Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Anchor Risk.
Diversification Opportunities for Ab Impact and Anchor Risk
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABIMX and Anchor is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Anchor Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Risk Managed and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Anchor Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Risk Managed has no effect on the direction of Ab Impact i.e., Ab Impact and Anchor Risk go up and down completely randomly.
Pair Corralation between Ab Impact and Anchor Risk
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 0.72 times more return on investment than Anchor Risk. However, Ab Impact Municipal is 1.39 times less risky than Anchor Risk. It trades about 0.07 of its potential returns per unit of risk. Anchor Risk Managed is currently generating about 0.03 per unit of risk. If you would invest 897.00 in Ab Impact Municipal on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Ab Impact Municipal or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Anchor Risk Managed
Performance |
| Timeline |
| Ab Impact Municipal |
| Anchor Risk Managed |
Ab Impact and Anchor Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Anchor Risk
The main advantage of trading using opposite Ab Impact and Anchor Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Anchor Risk 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 Anchor Risk will offset losses from the drop in Anchor Risk's long position.| Ab Impact vs. HUMANA INC | Ab Impact vs. Aquagold International | Ab Impact vs. Barloworld Ltd ADR | Ab Impact vs. Morningstar Unconstrained Allocation |
| Anchor Risk vs. Lord Abbett Inflation | Anchor Risk vs. T Rowe Price | Anchor Risk vs. Aqr Managed Futures | Anchor Risk vs. Ab Bond Inflation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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