Correlation Between Ab High and Energy Fund
Can any of the company-specific risk be diversified away by investing in both Ab High and Energy Fund 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 Energy Fund 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 Energy Fund Class, you can compare the effects of market volatilities on Ab High and Energy Fund 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 Energy Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Energy Fund.
Diversification Opportunities for Ab High and Energy Fund
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGDAX and Energy is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Energy Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fund Class 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 Energy Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fund Class has no effect on the direction of Ab High i.e., Ab High and Energy Fund go up and down completely randomly.
Pair Corralation between Ab High and Energy Fund
Assuming the 90 days horizon Ab High Income is expected to generate 0.22 times more return on investment than Energy Fund. However, Ab High Income is 4.53 times less risky than Energy Fund. It trades about 0.14 of its potential returns per unit of risk. Energy Fund Class is currently generating about 0.02 per unit of risk. If you would invest 579.00 in Ab High Income on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Ab High Income or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ab High Income vs. Energy Fund Class
Performance |
| Timeline |
| Ab High Income |
| Energy Fund Class |
Ab High and Energy Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Energy Fund
The main advantage of trading using opposite Ab High and Energy Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Energy Fund 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 Energy Fund will offset losses from the drop in Energy Fund's long position.| Ab High vs. Pace Smallmedium Value | Ab High vs. Heartland Value Plus | Ab High vs. Amg River Road | Ab High vs. Fpa Queens Road |
| Energy Fund vs. Shelton Emerging Markets | Energy Fund vs. Legg Mason Partners | Energy Fund vs. Mondrian Emerging Markets | Energy Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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