Correlation Between Global Gold and Ab Global
Can any of the company-specific risk be diversified away by investing in both Global Gold and Ab Global 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 Global Gold and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Ab Global E, you can compare the effects of market volatilities on Global Gold and Ab Global 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 Global Gold with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Ab Global.
Diversification Opportunities for Global Gold and Ab Global
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and GCEAX is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E and Global Gold 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 Global Gold Fund are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Global Gold i.e., Global Gold and Ab Global go up and down completely randomly.
Pair Corralation between Global Gold and Ab Global
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.54 times more return on investment than Ab Global. However, Global Gold is 2.54 times more volatile than Ab Global E. It trades about 0.06 of its potential returns per unit of risk. Ab Global E is currently generating about 0.09 per unit of risk. If you would invest 1,014 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 283.00 from holding Global Gold Fund or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Ab Global E
Performance |
| Timeline |
| Global Gold Fund |
| Ab Global E |
Global Gold and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Ab Global
The main advantage of trading using opposite Global Gold and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Ab Global 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 Global will offset losses from the drop in Ab Global's long position.| Global Gold vs. Technology Ultrasector Profund | Global Gold vs. Towpath Technology | Global Gold vs. Columbia Global Technology | Global Gold vs. Goldman Sachs Technology |
| Ab Global vs. Ab Small Cap | Ab Global vs. Lebenthal Lisanti Small | Ab Global vs. Mutual Of America | Ab Global vs. Touchstone Small Cap |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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