Correlation Between Ab High and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Ab High and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Ab High and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Floating Rate.
Diversification Opportunities for Ab High and Floating Rate
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGDIX and Floating is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Ab High i.e., Ab High and Floating Rate go up and down completely randomly.
Pair Corralation between Ab High and Floating Rate
Assuming the 90 days horizon Ab High is expected to generate 1.08 times less return on investment than Floating Rate. In addition to that, Ab High is 1.47 times more volatile than Floating Rate Fund. It trades about 0.16 of its total potential returns per unit of risk. Floating Rate Fund is currently generating about 0.26 per unit of volatility. If you would invest 647.00 in Floating Rate Fund on November 1, 2024 and sell it today you would earn a total of 169.00 from holding Floating Rate Fund or generate 26.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ab High Income vs. Floating Rate Fund
Performance |
| Timeline |
| Ab High Income |
| Floating Rate |
Ab High and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Floating Rate
The main advantage of trading using opposite Ab High and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Ab High vs. Payden High Income | Ab High vs. Msift High Yield | Ab High vs. Buffalo High Yield | Ab High vs. Artisan High Income |
| Floating Rate vs. Ultra Short Fixed Income | Floating Rate vs. Oakhurst Short Duration | Floating Rate vs. Siit Ultra Short | Floating Rate vs. Federated Government Ultrashort |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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