Correlation Between Ab Value and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Ab Value and Transamerica Asset 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 Value and Transamerica Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Transamerica Asset Allocation, you can compare the effects of market volatilities on Ab Value and Transamerica Asset 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 Value with a short position of Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Transamerica Asset.
Diversification Opportunities for Ab Value and Transamerica Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABVCX and Transamerica is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset and Ab Value 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 Value Fund are associated (or correlated) with Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Ab Value i.e., Ab Value and Transamerica Asset go up and down completely randomly.
Pair Corralation between Ab Value and Transamerica Asset
Assuming the 90 days horizon Ab Value Fund is expected to generate 1.79 times more return on investment than Transamerica Asset. However, Ab Value is 1.79 times more volatile than Transamerica Asset Allocation. It trades about 0.39 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.38 per unit of risk. If you would invest 1,928 in Ab Value Fund on September 5, 2024 and sell it today you would earn a total of 139.00 from holding Ab Value Fund or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Value Fund vs. Transamerica Asset Allocation
Performance |
| Timeline |
| Ab Value Fund |
| Transamerica Asset |
Ab Value and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Transamerica Asset
The main advantage of trading using opposite Ab Value and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset's long position.| Ab Value vs. Massmutual Select Diversified | Ab Value vs. Calamos Market Neutral | Ab Value vs. Ep Emerging Markets | Ab Value vs. Western Assets Emerging |
| Transamerica Asset vs. Ab Value Fund | Transamerica Asset vs. Growth Strategy Fund | Transamerica Asset vs. Eic Value Fund | Transamerica Asset vs. Qs Growth Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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