Correlation Between Ab Global and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Ab Global and Equity Growth 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 Global and Equity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Real and Equity Growth Fund, you can compare the effects of market volatilities on Ab Global and Equity Growth 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 Global with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Equity Growth.
Diversification Opportunities for Ab Global and Equity Growth
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEEIX and Equity is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth and Ab Global 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 Global Real are associated (or correlated) with Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Ab Global i.e., Ab Global and Equity Growth go up and down completely randomly.
Pair Corralation between Ab Global and Equity Growth
Assuming the 90 days horizon Ab Global Real is expected to under-perform the Equity Growth. In addition to that, Ab Global is 1.11 times more volatile than Equity Growth Fund. It trades about -0.12 of its total potential returns per unit of risk. Equity Growth Fund is currently generating about 0.07 per unit of volatility. If you would invest 3,441 in Equity Growth Fund on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Equity Growth Fund or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. Equity Growth Fund
Performance |
| Timeline |
| Ab Global Real |
| Equity Growth |
Ab Global and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Equity Growth
The main advantage of trading using opposite Ab Global and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Ab Global vs. Pro Blend Moderate Term | Ab Global vs. Jp Morgan Smartretirement | Ab Global vs. Blackrock Moderate Prepared | Ab Global vs. Strategic Allocation Moderate |
| Equity Growth vs. Ab Global Risk | Equity Growth vs. Ab Global Risk | Equity Growth vs. Legg Mason Global | Equity Growth vs. Barings Global Floating |
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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