Correlation Between Ab High and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Ab High and Growth 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 Growth 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 Growth Fund C, you can compare the effects of market volatilities on Ab High and Growth 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Growth Fund.
Diversification Opportunities for Ab High and Growth Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGDAX and Growth is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Growth Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund C 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund C has no effect on the direction of Ab High i.e., Ab High and Growth Fund go up and down completely randomly.
Pair Corralation between Ab High and Growth Fund
Assuming the 90 days horizon Ab High is expected to generate 10.54 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Ab High Income is 5.99 times less risky than Growth Fund. It trades about 0.18 of its potential returns per unit of risk. Growth Fund C is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,789 in Growth Fund C on September 4, 2024 and sell it today you would earn a total of 308.00 from holding Growth Fund C or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab High Income vs. Growth Fund C
Performance |
| Timeline |
| Ab High Income |
| Growth Fund C |
Ab High and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Growth Fund
The main advantage of trading using opposite Ab High and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth 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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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