Correlation Between Abbey Capital and Inverse High
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Inverse High 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 Inverse High 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 Inverse High Yield, you can compare the effects of market volatilities on Abbey Capital and Inverse High 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 Inverse High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Inverse High.
Diversification Opportunities for Abbey Capital and Inverse High
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Abbey and Inverse is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Inverse High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse High Yield 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 Inverse High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse High Yield has no effect on the direction of Abbey Capital i.e., Abbey Capital and Inverse High go up and down completely randomly.
Pair Corralation between Abbey Capital and Inverse High
Assuming the 90 days horizon Abbey Capital Futures is expected to generate 1.16 times more return on investment than Inverse High. However, Abbey Capital is 1.16 times more volatile than Inverse High Yield. It trades about 0.02 of its potential returns per unit of risk. Inverse High Yield is currently generating about -0.07 per unit of risk. If you would invest 1,104 in Abbey Capital Futures on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Abbey Capital Futures or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Inverse High Yield
Performance |
| Timeline |
| Abbey Capital Futures |
| Inverse High Yield |
Abbey Capital and Inverse High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Inverse High
The main advantage of trading using opposite Abbey Capital and Inverse High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Inverse High 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 Inverse High will offset losses from the drop in Inverse High's long position.| Abbey Capital vs. Artisan High Income | Abbey Capital vs. Lord Abbett Short | Abbey Capital vs. City National Rochdale | Abbey Capital vs. Virtus High Yield |
| Inverse High vs. Msift High Yield | Inverse High vs. Dunham High Yield | Inverse High vs. Buffalo High Yield | Inverse High vs. Six Circles Credit |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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