Correlation Between Abbey Capital and Short-term Investment
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Short-term Investment 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 Short-term Investment 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 Short Term Investment Trust, you can compare the effects of market volatilities on Abbey Capital and Short-term Investment 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 Short-term Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Short-term Investment.
Diversification Opportunities for Abbey Capital and Short-term Investment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abbey and Short-term is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Short Term Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Investment 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 Short-term Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Investment has no effect on the direction of Abbey Capital i.e., Abbey Capital and Short-term Investment go up and down completely randomly.
Pair Corralation between Abbey Capital and Short-term Investment
Assuming the 90 days horizon Abbey Capital Futures is expected to under-perform the Short-term Investment. In addition to that, Abbey Capital is 3.53 times more volatile than Short Term Investment Trust. It trades about -0.02 of its total potential returns per unit of risk. Short Term Investment Trust is currently generating about 0.14 per unit of volatility. If you would invest 95.00 in Short Term Investment Trust on December 11, 2024 and sell it today you would earn a total of 5.00 from holding Short Term Investment Trust or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Abbey Capital Futures vs. Short Term Investment Trust
Performance |
| Timeline |
| Abbey Capital Futures |
| Short Term Investment |
Abbey Capital and Short-term Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Short-term Investment
The main advantage of trading using opposite Abbey Capital and Short-term Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Short-term Investment 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 Short-term Investment will offset losses from the drop in Short-term Investment's long position.| Abbey Capital vs. Precious Metals And | ||
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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