Correlation Between Abbey Capital and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Shenkman Short 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 Shenkman Short 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 Shenkman Short Duration, you can compare the effects of market volatilities on Abbey Capital and Shenkman Short 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 Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Shenkman Short.
Diversification Opportunities for Abbey Capital and Shenkman Short
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abbey and Shenkman is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration 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 Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of Abbey Capital i.e., Abbey Capital and Shenkman Short go up and down completely randomly.
Pair Corralation between Abbey Capital and Shenkman Short
Assuming the 90 days horizon Abbey Capital is expected to generate 2.81 times less return on investment than Shenkman Short. In addition to that, Abbey Capital is 4.04 times more volatile than Shenkman Short Duration. It trades about 0.03 of its total potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.38 per unit of volatility. If you would invest 978.00 in Shenkman Short Duration on November 2, 2024 and sell it today you would earn a total of 8.00 from holding Shenkman Short Duration or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Shenkman Short Duration
Performance |
| Timeline |
| Abbey Capital Futures |
| Shenkman Short Duration |
Abbey Capital and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Shenkman Short
The main advantage of trading using opposite Abbey Capital and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Shenkman Short 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 Shenkman Short will offset losses from the drop in Shenkman Short's long position.| Abbey Capital vs. Ab Bond Inflation | Abbey Capital vs. Ab Bond Inflation | Abbey Capital vs. Short Duration Inflation | Abbey Capital vs. Ab Bond Inflation |
| Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Floating Rate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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