Correlation Between Ab Bond and Precious Metals
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Precious Metals 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 Precious Metals 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 Precious Metals Fund, you can compare the effects of market volatilities on Ab Bond and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Precious Metals.
Diversification Opportunities for Ab Bond and Precious Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ABNTX and Precious is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Precious Metals Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals has no effect on the direction of Ab Bond i.e., Ab Bond and Precious Metals go up and down completely randomly.
Pair Corralation between Ab Bond and Precious Metals
Assuming the 90 days horizon Ab Bond is expected to generate 2.79 times less return on investment than Precious Metals. But when comparing it to its historical volatility, Ab Bond Inflation is 9.84 times less risky than Precious Metals. It trades about 0.14 of its potential returns per unit of risk. Precious Metals Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,525 in Precious Metals Fund on September 3, 2024 and sell it today you would earn a total of 306.00 from holding Precious Metals Fund or generate 8.68% 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. Precious Metals Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| Precious Metals |
Ab Bond and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Precious Metals
The main advantage of trading using opposite Ab Bond and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| Ab Bond vs. Blackrock High Yield | Ab Bond vs. Pgim High Yield | Ab Bond vs. Goldman Sachs High | Ab Bond vs. Gmo High Yield |
| Precious Metals vs. Ms Global Fixed | Precious Metals vs. Blrc Sgy Mnp | Precious Metals vs. Ab Bond Inflation | Precious Metals 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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