Correlation Between Ab High and Northern Funds
Can any of the company-specific risk be diversified away by investing in both Ab High and Northern Funds 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 High and Northern Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab High Income and Northern Funds , you can compare the effects of market volatilities on Ab High and Northern Funds 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 High with a short position of Northern Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Northern Funds.
Diversification Opportunities for Ab High and Northern Funds
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AGDAX and Northern is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Northern Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Funds and Ab High 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 High Income are associated (or correlated) with Northern Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Funds has no effect on the direction of Ab High i.e., Ab High and Northern Funds go up and down completely randomly.
Pair Corralation between Ab High and Northern Funds
Assuming the 90 days horizon Ab High Income is expected to generate 1.26 times more return on investment than Northern Funds. However, Ab High is 1.26 times more volatile than Northern Funds . It trades about 0.14 of its potential returns per unit of risk. Northern Funds is currently generating about 0.07 per unit of risk. If you would invest 571.00 in Ab High Income on September 25, 2024 and sell it today you would earn a total of 129.00 from holding Ab High Income or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Ab High Income vs. Northern Funds
Performance |
| Timeline |
| Ab High Income |
| Northern Funds |
Ab High and Northern Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Northern Funds
The main advantage of trading using opposite Ab High and Northern Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Northern Funds 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 Northern Funds will offset losses from the drop in Northern Funds' long position.| Ab High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Minnesota Portfolio |
| Northern Funds vs. Msift High Yield | Northern Funds vs. Fidelity Capital Income | Northern Funds vs. City National Rochdale | Northern Funds 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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