Correlation Between Ab Bond and Ssga International
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Ssga International 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 Ssga International 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 Ssga International Stock, you can compare the effects of market volatilities on Ab Bond and Ssga International 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 Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Ssga International.
Diversification Opportunities for Ab Bond and Ssga International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABNTX and Ssga is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock 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 Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Ab Bond i.e., Ab Bond and Ssga International go up and down completely randomly.
Pair Corralation between Ab Bond and Ssga International
Assuming the 90 days horizon Ab Bond is expected to generate 6.03 times less return on investment than Ssga International. But when comparing it to its historical volatility, Ab Bond Inflation is 4.22 times less risky than Ssga International. It trades about 0.08 of its potential returns per unit of risk. Ssga International Stock is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,110 in Ssga International Stock on September 5, 2024 and sell it today you would earn a total of 80.00 from holding Ssga International Stock or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Ssga International Stock
Performance |
| Timeline |
| Ab Bond Inflation |
| Ssga International Stock |
Ab Bond and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Ssga International
The main advantage of trading using opposite Ab Bond and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Ssga International 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 Ssga International will offset losses from the drop in Ssga International's long position.| Ab Bond vs. Qs Large Cap | Ab Bond vs. Transamerica Large Cap | Ab Bond vs. M Large Cap | Ab Bond vs. Fundamental Large Cap |
| Ssga International vs. Sei Daily Income | Ssga International vs. Versatile Bond Portfolio | Ssga International vs. Ab Bond Inflation | Ssga International vs. Transamerica Funds |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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