Correlation Between Ab Impact and Great-west
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Great-west 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 Great-west 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 Great West Sp Mid, you can compare the effects of market volatilities on Ab Impact and Great-west 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 Great-west. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Great-west.
Diversification Opportunities for Ab Impact and Great-west
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABIMX and Great-west is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Great West Sp Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp 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 Great-west. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Ab Impact i.e., Ab Impact and Great-west go up and down completely randomly.
Pair Corralation between Ab Impact and Great-west
Assuming the 90 days horizon Ab Impact is expected to generate 2.55 times less return on investment than Great-west. But when comparing it to its historical volatility, Ab Impact Municipal is 3.39 times less risky than Great-west. It trades about 0.05 of its potential returns per unit of risk. Great West Sp Mid is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,785 in Great West Sp Mid on October 10, 2024 and sell it today you would earn a total of 326.00 from holding Great West Sp Mid or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Great West Sp Mid
Performance |
| Timeline |
| Ab Impact Municipal |
| Great West Sp |
Ab Impact and Great-west Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Great-west
The main advantage of trading using opposite Ab Impact and Great-west positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Great-west 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 Great-west will offset losses from the drop in Great-west's long position.| Ab Impact vs. Alliancebernstein Global Highome | Ab Impact vs. Ab Global Bond | Ab Impact vs. Barings Global Floating | Ab Impact vs. Morgan Stanley Global |
| Great-west vs. Ab Impact Municipal | Great-west vs. Victory Rs Partners | Great-west vs. Omni Small Cap Value | Great-west vs. Eip Growth And |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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