Correlation Between Ab Global and Federated Bond
Can any of the company-specific risk be diversified away by investing in both Ab Global and Federated Bond 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 Federated Bond 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 Federated Bond Fund, you can compare the effects of market volatilities on Ab Global and Federated Bond 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 Federated Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Federated Bond.
Diversification Opportunities for Ab Global and Federated Bond
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AEEIX and Federated is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Federated Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Bond 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 Federated Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Bond has no effect on the direction of Ab Global i.e., Ab Global and Federated Bond go up and down completely randomly.
Pair Corralation between Ab Global and Federated Bond
Assuming the 90 days horizon Ab Global Real is expected to under-perform the Federated Bond. In addition to that, Ab Global is 2.57 times more volatile than Federated Bond Fund. It trades about -0.03 of its total potential returns per unit of risk. Federated Bond Fund is currently generating about 0.17 per unit of volatility. If you would invest 833.00 in Federated Bond Fund on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Federated Bond Fund or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Global Real vs. Federated Bond Fund
Performance |
| Timeline |
| Ab Global Real |
| Federated Bond |
Ab Global and Federated Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Federated Bond
The main advantage of trading using opposite Ab Global and Federated Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Federated Bond 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 Federated Bond will offset losses from the drop in Federated Bond's long position.| Ab Global vs. Eic Value Fund | Ab Global vs. Versatile Bond Portfolio | Ab Global vs. T Rowe Price | Ab Global vs. Small Cap Stock |
| Federated Bond vs. Federated Emerging Market | Federated Bond vs. Federated Mdt All | Federated Bond vs. Federated Mdt Balanced | Federated Bond vs. Federated Global Allocation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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