Correlation Between Ab Global and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Ab Global and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Ab Global and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Regional Bank.
Diversification Opportunities for Ab Global and Regional Bank
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEEIX and Regional is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Ab Global i.e., Ab Global and Regional Bank go up and down completely randomly.
Pair Corralation between Ab Global and Regional Bank
Assuming the 90 days horizon Ab Global Real is expected to under-perform the Regional Bank. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Global Real is 1.19 times less risky than Regional Bank. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Regional Bank Fund is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 3,350 in Regional Bank Fund on September 12, 2024 and sell it today you would lose (44.00) from holding Regional Bank Fund or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. Regional Bank Fund
Performance |
| Timeline |
| Ab Global Real |
| Regional Bank |
Ab Global and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Regional Bank
The main advantage of trading using opposite Ab Global and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank'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 |
| Regional Bank vs. T Rowe Price | Regional Bank vs. Lgm Risk Managed | Regional Bank vs. Metropolitan West High | Regional Bank vs. Ab Global Risk |
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 Stocks Directory module to find actively traded stocks across global markets.
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