Correlation Between Applied Finance and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Ab 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 Applied Finance and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Ab Bond Inflation, you can compare the effects of market volatilities on Applied Finance and Ab 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 Applied Finance with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Ab Bond.
Diversification Opportunities for Applied Finance and Ab Bond
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and ABNTX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Applied Finance i.e., Applied Finance and Ab Bond go up and down completely randomly.
Pair Corralation between Applied Finance and Ab Bond
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 8.93 times more return on investment than Ab Bond. However, Applied Finance is 8.93 times more volatile than Ab Bond Inflation. It trades about 0.24 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.06 per unit of risk. If you would invest 2,279 in Applied Finance Explorer on August 28, 2024 and sell it today you would earn a total of 170.00 from holding Applied Finance Explorer or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Ab Bond Inflation
Performance |
| Timeline |
| Applied Finance Explorer |
| Ab Bond Inflation |
Applied Finance and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Ab Bond
The main advantage of trading using opposite Applied Finance and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Ab 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Applied Finance vs. Applied Finance Core | Applied Finance vs. Applied Finance Core | Applied Finance vs. Applied Finance Select | Applied Finance vs. Applied Finance Select |
| Ab Bond vs. Small Pany Growth | Ab Bond vs. Chase Growth Fund | Ab Bond vs. Pace Smallmedium Growth | Ab Bond vs. T Rowe Price |
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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