Correlation Between Ab Value and Steward Large
Can any of the company-specific risk be diversified away by investing in both Ab Value and Steward Large 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 Steward Large 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 Steward Large Cap, you can compare the effects of market volatilities on Ab Value and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Steward Large.
Diversification Opportunities for Ab Value and Steward Large
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABVCX and Steward is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Ab Value i.e., Ab Value and Steward Large go up and down completely randomly.
Pair Corralation between Ab Value and Steward Large
Assuming the 90 days horizon Ab Value Fund is expected to under-perform the Steward Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Value Fund is 1.24 times less risky than Steward Large. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Steward Large Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,318 in Steward Large Cap on September 13, 2024 and sell it today you would earn a total of 94.00 from holding Steward Large Cap or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Value Fund vs. Steward Large Cap
Performance |
| Timeline |
| Ab Value Fund |
| Steward Large Cap |
Ab Value and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Steward Large
The main advantage of trading using opposite Ab Value and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| Ab Value vs. Franklin Adjustable Government | Ab Value vs. Us Government Securities | Ab Value vs. Lord Abbett Government | Ab Value vs. Dunham Porategovernment Bond |
| Steward Large vs. Steward Small Mid Cap | Steward Large vs. Steward Small Mid Cap | Steward Large vs. Steward Ered Call | Steward Large vs. Steward Ered Call |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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