Correlation Between AJ Bell and CT Global
Can any of the company-specific risk be diversified away by investing in both AJ Bell and CT 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 AJ Bell and CT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and CT Global Managed, you can compare the effects of market volatilities on AJ Bell and CT 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 AJ Bell with a short position of CT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and CT Global.
Diversification Opportunities for AJ Bell and CT Global
Very good diversification
The 3 months correlation between AJB and CMPG is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and CT Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Global Managed and AJ Bell 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 AJ Bell plc are associated (or correlated) with CT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Global Managed has no effect on the direction of AJ Bell i.e., AJ Bell and CT Global go up and down completely randomly.
Pair Corralation between AJ Bell and CT Global
Assuming the 90 days trading horizon AJ Bell plc is expected to generate 5.41 times more return on investment than CT Global. However, AJ Bell is 5.41 times more volatile than CT Global Managed. It trades about 0.09 of its potential returns per unit of risk. CT Global Managed is currently generating about 0.15 per unit of risk. If you would invest 30,769 in AJ Bell plc on November 3, 2024 and sell it today you would earn a total of 13,931 from holding AJ Bell plc or generate 45.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Bell plc vs. CT Global Managed
Performance |
| Timeline |
| AJ Bell plc |
| CT Global Managed |
AJ Bell and CT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and CT Global
The main advantage of trading using opposite AJ Bell and CT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell position performs unexpectedly, CT 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 CT Global will offset losses from the drop in CT Global's long position.| AJ Bell vs. Golden Metal Resources | AJ Bell vs. Spirent Communications plc | AJ Bell vs. Geely Automobile Holdings | AJ Bell vs. First Class Metals |
| CT Global vs. Spotify Technology SA | CT Global vs. DXC Technology Co | CT Global vs. Hochschild Mining plc | CT Global vs. Take Two Interactive Software |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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