Correlation Between Ab New and Simt High
Can any of the company-specific risk be diversified away by investing in both Ab New and Simt High 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 New and Simt High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab New York and Simt High Yield, you can compare the effects of market volatilities on Ab New and Simt High 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 New with a short position of Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab New and Simt High.
Diversification Opportunities for Ab New and Simt High
Very weak diversification
The 3 months correlation between ALNVX and Simt is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ab New York and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield and Ab New 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 New York are associated (or correlated) with Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Ab New i.e., Ab New and Simt High go up and down completely randomly.
Pair Corralation between Ab New and Simt High
Assuming the 90 days horizon Ab New York is expected to under-perform the Simt High. In addition to that, Ab New is 1.32 times more volatile than Simt High Yield. It trades about -0.37 of its total potential returns per unit of risk. Simt High Yield is currently generating about -0.26 per unit of volatility. If you would invest 520.00 in Simt High Yield on October 12, 2024 and sell it today you would lose (5.00) from holding Simt High Yield or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab New York vs. Simt High Yield
Performance |
| Timeline |
| Ab New York |
| Simt High Yield |
Ab New and Simt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab New and Simt High
The main advantage of trading using opposite Ab New and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab New position performs unexpectedly, Simt High 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 Simt High will offset losses from the drop in Simt High's long position.| Ab New vs. Greenspring Fund Retail | Ab New vs. Small Cap Equity | Ab New vs. Quantitative Longshort Equity | Ab New vs. Siit Equity Factor |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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