Correlation Between Ab Bond and High Yield
Can any of the company-specific risk be diversified away by investing in both Ab Bond and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Ab Bond and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and High Yield.
Diversification Opportunities for Ab Bond and High Yield
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between ABNOX and High is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Ab Bond i.e., Ab Bond and High Yield go up and down completely randomly.
Pair Corralation between Ab Bond and High Yield
Assuming the 90 days horizon Ab Bond is expected to generate 6.39 times less return on investment than High Yield. In addition to that, Ab Bond is 1.01 times more volatile than High Yield Fund. It trades about 0.03 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.19 per unit of volatility. If you would invest 773.00 in High Yield Fund on August 31, 2024 and sell it today you would earn a total of 5.00 from holding High Yield Fund or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. High Yield Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| High Yield Fund |
Ab Bond and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and High Yield
The main advantage of trading using opposite Ab Bond and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Ab Bond vs. Vanguard Short Term Inflation Protected | Ab Bond vs. HUMANA INC | Ab Bond vs. Aquagold International | Ab Bond vs. Barloworld Ltd ADR |
| High Yield vs. Fidelity Advisor 529 | High Yield vs. Lord Abbett Inflation | High Yield vs. Ab Bond Inflation | High Yield 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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