Correlation Between Abbey Capital and Real Estate
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Real Estate 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 Abbey Capital and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbey Capital Futures and Real Estate Fund, you can compare the effects of market volatilities on Abbey Capital and Real Estate 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 Abbey Capital with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Real Estate.
Diversification Opportunities for Abbey Capital and Real Estate
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abbey and REAL is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Real Estate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Fund and Abbey Capital 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 Abbey Capital Futures are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Fund has no effect on the direction of Abbey Capital i.e., Abbey Capital and Real Estate go up and down completely randomly.
Pair Corralation between Abbey Capital and Real Estate
Assuming the 90 days horizon Abbey Capital Futures is expected to generate 0.3 times more return on investment than Real Estate. However, Abbey Capital Futures is 3.29 times less risky than Real Estate. It trades about 0.04 of its potential returns per unit of risk. Real Estate Fund is currently generating about -0.01 per unit of risk. If you would invest 1,104 in Abbey Capital Futures on October 25, 2024 and sell it today you would earn a total of 3.00 from holding Abbey Capital Futures or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Real Estate Fund
Performance |
| Timeline |
| Abbey Capital Futures |
| Real Estate Fund |
Abbey Capital and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Real Estate
The main advantage of trading using opposite Abbey Capital and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Abbey Capital vs. Real Estate Fund | Abbey Capital vs. Redwood Real Estate | Abbey Capital vs. Simt Real Estate | Abbey Capital vs. Fidelity Real Estate |
| Real Estate vs. Ab High Income | Real Estate vs. Mesirow Financial High | Real Estate vs. Millerhoward High Income | Real Estate vs. Access Flex High |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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