Correlation Between Ab Global and Teton Convertible
Can any of the company-specific risk be diversified away by investing in both Ab Global and Teton Convertible 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 Teton Convertible 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 Teton Vertible Securities, you can compare the effects of market volatilities on Ab Global and Teton Convertible 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 Teton Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Teton Convertible.
Diversification Opportunities for Ab Global and Teton Convertible
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEEIX and Teton is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Teton Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Vertible Securities 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 Teton Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Vertible Securities has no effect on the direction of Ab Global i.e., Ab Global and Teton Convertible go up and down completely randomly.
Pair Corralation between Ab Global and Teton Convertible
Assuming the 90 days horizon Ab Global is expected to generate 4.64 times less return on investment than Teton Convertible. In addition to that, Ab Global is 1.24 times more volatile than Teton Vertible Securities. It trades about 0.1 of its total potential returns per unit of risk. Teton Vertible Securities is currently generating about 0.56 per unit of volatility. If you would invest 1,295 in Teton Vertible Securities on September 4, 2024 and sell it today you would earn a total of 106.00 from holding Teton Vertible Securities or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. Teton Vertible Securities
Performance |
| Timeline |
| Ab Global Real |
| Teton Vertible Securities |
Ab Global and Teton Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Teton Convertible
The main advantage of trading using opposite Ab Global and Teton Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Teton Convertible 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 Teton Convertible will offset losses from the drop in Teton Convertible's long position.| Ab Global vs. Us Government Securities | Ab Global vs. Us Government Securities | Ab Global vs. Prudential Government Income | Ab Global vs. Dunham Porategovernment Bond |
| Teton Convertible vs. Morningstar Global Income | Teton Convertible vs. Ab Global Real | Teton Convertible vs. Siit Global Managed | Teton Convertible vs. Alliancebernstein Global High |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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