Correlation Between Ab Growth and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Ab Growth 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 Growth 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 Growth Fund and Growth Fund Of, you can compare the effects of market volatilities on Ab Growth 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 Growth with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Growth and Growth Fund.
Diversification Opportunities for Ab Growth and Growth Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AGRCX and Growth is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ab Growth Fund and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Ab Growth 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 Growth Fund 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 has no effect on the direction of Ab Growth i.e., Ab Growth and Growth Fund go up and down completely randomly.
Pair Corralation between Ab Growth and Growth Fund
Assuming the 90 days horizon Ab Growth is expected to generate 1.46 times less return on investment than Growth Fund. In addition to that, Ab Growth is 1.46 times more volatile than Growth Fund Of. It trades about 0.05 of its total potential returns per unit of risk. Growth Fund Of is currently generating about 0.1 per unit of volatility. If you would invest 5,403 in Growth Fund Of on September 1, 2024 and sell it today you would earn a total of 2,773 from holding Growth Fund Of or generate 51.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Growth Fund vs. Growth Fund Of
Performance |
| Timeline |
| Ab Growth Fund |
| Growth Fund |
Ab Growth and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Growth and Growth Fund
The main advantage of trading using opposite Ab Growth and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Growth 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 Growth vs. Ab Sustainable Global | Ab Growth vs. Ab Relative Value | Ab Growth vs. Ab Growth Fund | Ab Growth vs. Ab Small Cap |
| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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