Correlation Between Ab National and Ab Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Ab National and Ab Pennsylvania 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 National and Ab Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab National Portfolio and Ab Pennsylvania Portfolio, you can compare the effects of market volatilities on Ab National and Ab Pennsylvania 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 National with a short position of Ab Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab National and Ab Pennsylvania.
Diversification Opportunities for Ab National and Ab Pennsylvania
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ALTHX and APAAX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab National Portfolio and Ab Pennsylvania Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Pennsylvania Portfolio and Ab National 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 National Portfolio are associated (or correlated) with Ab Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Pennsylvania Portfolio has no effect on the direction of Ab National i.e., Ab National and Ab Pennsylvania go up and down completely randomly.
Pair Corralation between Ab National and Ab Pennsylvania
Assuming the 90 days horizon Ab National Portfolio is expected to generate 1.06 times more return on investment than Ab Pennsylvania. However, Ab National is 1.06 times more volatile than Ab Pennsylvania Portfolio. It trades about 0.07 of its potential returns per unit of risk. Ab Pennsylvania Portfolio is currently generating about 0.07 per unit of risk. If you would invest 903.00 in Ab National Portfolio on August 28, 2024 and sell it today you would earn a total of 72.00 from holding Ab National Portfolio or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab National Portfolio vs. Ab Pennsylvania Portfolio
Performance |
| Timeline |
| Ab National Portfolio |
| Ab Pennsylvania Portfolio |
Ab National and Ab Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab National and Ab Pennsylvania
The main advantage of trading using opposite Ab National and Ab Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab National position performs unexpectedly, Ab Pennsylvania 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 Pennsylvania will offset losses from the drop in Ab Pennsylvania's long position.| Ab National vs. Ab Global E | Ab National vs. Ab Global E | Ab National vs. Ab Global E | Ab National vs. Ab Minnesota Portfolio |
| Ab Pennsylvania vs. Ab Global E | Ab Pennsylvania vs. Ab Global E | Ab Pennsylvania vs. Ab Global E | Ab Pennsylvania vs. Ab Minnesota Portfolio |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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