Correlation Between Ab Global and 1919 Financial
Can any of the company-specific risk be diversified away by investing in both Ab Global and 1919 Financial 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 1919 Financial 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 1919 Financial Services, you can compare the effects of market volatilities on Ab Global and 1919 Financial 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 1919 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and 1919 Financial.
Diversification Opportunities for Ab Global and 1919 Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEEIX and 1919 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and 1919 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Financial Services 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 1919 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Financial Services has no effect on the direction of Ab Global i.e., Ab Global and 1919 Financial go up and down completely randomly.
Pair Corralation between Ab Global and 1919 Financial
Assuming the 90 days horizon Ab Global Real is expected to generate 0.27 times more return on investment than 1919 Financial. However, Ab Global Real is 3.65 times less risky than 1919 Financial. It trades about -0.08 of its potential returns per unit of risk. 1919 Financial Services is currently generating about -0.22 per unit of risk. If you would invest 1,506 in Ab Global Real on September 14, 2024 and sell it today you would lose (15.00) from holding Ab Global Real or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. 1919 Financial Services
Performance |
| Timeline |
| Ab Global Real |
| 1919 Financial Services |
Ab Global and 1919 Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and 1919 Financial
The main advantage of trading using opposite Ab Global and 1919 Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, 1919 Financial 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 1919 Financial will offset losses from the drop in 1919 Financial's long position.| Ab Global vs. Pace Large Growth | Ab Global vs. Enhanced Large Pany | Ab Global vs. Upright Assets Allocation | Ab Global vs. Guidemark Large Cap |
| 1919 Financial vs. Gabelli Global Financial | 1919 Financial vs. Mesirow Financial Small | 1919 Financial vs. Icon Financial Fund | 1919 Financial vs. Prudential Jennison Financial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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