Correlation Between Ab Bond and Polen Us
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Polen Us 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 Polen Us 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 Polen Small Pany, you can compare the effects of market volatilities on Ab Bond and Polen Us 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 Polen Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Polen Us.
Diversification Opportunities for Ab Bond and Polen Us
Excellent diversification
The 3 months correlation between ABNTX and Polen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Polen Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Small Pany 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 Polen Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Small Pany has no effect on the direction of Ab Bond i.e., Ab Bond and Polen Us go up and down completely randomly.
Pair Corralation between Ab Bond and Polen Us
Assuming the 90 days horizon Ab Bond is expected to generate 3.18 times less return on investment than Polen Us. But when comparing it to its historical volatility, Ab Bond Inflation is 4.71 times less risky than Polen Us. It trades about 0.06 of its potential returns per unit of risk. Polen Small Pany is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,272 in Polen Small Pany on September 4, 2024 and sell it today you would earn a total of 346.00 from holding Polen Small Pany or generate 27.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Polen Small Pany
Performance |
| Timeline |
| Ab Bond Inflation |
| Polen Small Pany |
Ab Bond and Polen Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Polen Us
The main advantage of trading using opposite Ab Bond and Polen Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Polen Us 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 Polen Us will offset losses from the drop in Polen Us' long position.| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
| Polen Us vs. Prnpl Inv Fd | Polen Us vs. Polen Global Growth | Polen Us vs. Polen Global Growth | Polen Us vs. Polen International Growth |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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