Correlation Between Ab Bond and Fmasx
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Fmasx 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 Bond and Fmasx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Fmasx, you can compare the effects of market volatilities on Ab Bond and Fmasx 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 Bond with a short position of Fmasx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Fmasx.
Diversification Opportunities for Ab Bond and Fmasx
Poor diversification
The 3 months correlation between ABNOX and Fmasx is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Fmasx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fmasx and Ab Bond 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 Bond Inflation are associated (or correlated) with Fmasx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fmasx has no effect on the direction of Ab Bond i.e., Ab Bond and Fmasx go up and down completely randomly.
Pair Corralation between Ab Bond and Fmasx
Assuming the 90 days horizon Ab Bond is expected to generate 4.86 times less return on investment than Fmasx. But when comparing it to its historical volatility, Ab Bond Inflation is 7.74 times less risky than Fmasx. It trades about 0.28 of its potential returns per unit of risk. Fmasx is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,479 in Fmasx on November 3, 2024 and sell it today you would earn a total of 67.00 from holding Fmasx or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Bond Inflation vs. Fmasx
Performance |
| Timeline |
| Ab Bond Inflation |
| Fmasx |
Ab Bond and Fmasx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Fmasx
The main advantage of trading using opposite Ab Bond and Fmasx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Fmasx 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 Fmasx will offset losses from the drop in Fmasx's long position.| Ab Bond vs. Growth Strategy Fund | Ab Bond vs. Investec Emerging Markets | Ab Bond vs. Nasdaq 100 2x Strategy | Ab Bond vs. Balanced Strategy Fund |
| Fmasx vs. Angel Oak Multi Strategy | Fmasx vs. Mid Cap 15x Strategy | Fmasx vs. Balanced Strategy Fund | Fmasx vs. Barings Emerging Markets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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