Correlation Between Ab Bond and Frost Credit
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Frost Credit 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 Frost Credit 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 Frost Credit Fund, you can compare the effects of market volatilities on Ab Bond and Frost Credit 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 Frost Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Frost Credit.
Diversification Opportunities for Ab Bond and Frost Credit
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ABNTX and Frost is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Frost Credit Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Credit 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 Frost Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Credit has no effect on the direction of Ab Bond i.e., Ab Bond and Frost Credit go up and down completely randomly.
Pair Corralation between Ab Bond and Frost Credit
Assuming the 90 days horizon Ab Bond is expected to generate 10.5 times less return on investment than Frost Credit. But when comparing it to its historical volatility, Ab Bond Inflation is 1.3 times less risky than Frost Credit. It trades about 0.03 of its potential returns per unit of risk. Frost Credit Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 944.00 in Frost Credit Fund on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Frost Credit Fund or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Frost Credit Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| Frost Credit |
Ab Bond and Frost Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Frost Credit
The main advantage of trading using opposite Ab Bond and Frost Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Frost Credit 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 Frost Credit will offset losses from the drop in Frost Credit's long position.| Ab Bond vs. SCOR PK | Ab Bond vs. Morningstar Unconstrained Allocation | Ab Bond vs. Thrivent High Yield | Ab Bond vs. Via Renewables |
| Frost Credit vs. Tiaa Cref Small Cap Blend | Frost Credit vs. Blackrock Sm Cap | Frost Credit vs. Sentinel Small Pany | Frost Credit vs. T Rowe Price |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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