Correlation Between Ab Minnesota and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ab Minnesota and Emerging Markets 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 Minnesota and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Minnesota Portfolio and Emerging Markets Portfolio, you can compare the effects of market volatilities on Ab Minnesota and Emerging Markets 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 Minnesota with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Minnesota and Emerging Markets.
Diversification Opportunities for Ab Minnesota and Emerging Markets
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMNCX and Emerging is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ab Minnesota Portfolio and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Ab Minnesota 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 Minnesota Portfolio are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Ab Minnesota i.e., Ab Minnesota and Emerging Markets go up and down completely randomly.
Pair Corralation between Ab Minnesota and Emerging Markets
Assuming the 90 days horizon Ab Minnesota Portfolio is expected to generate 0.2 times more return on investment than Emerging Markets. However, Ab Minnesota Portfolio is 5.03 times less risky than Emerging Markets. It trades about -0.02 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about -0.02 per unit of risk. If you would invest 965.00 in Ab Minnesota Portfolio on August 26, 2024 and sell it today you would lose (3.00) from holding Ab Minnesota Portfolio or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Minnesota Portfolio vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Ab Minnesota Portfolio |
| Emerging Markets Por |
Ab Minnesota and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Minnesota and Emerging Markets
The main advantage of trading using opposite Ab Minnesota and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Minnesota position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Ab Minnesota vs. Enhanced Large Pany | Ab Minnesota vs. Rational Strategic Allocation | Ab Minnesota vs. Quantitative U S | Ab Minnesota vs. Goldman Sachs Large |
| Emerging Markets vs. Ab Global E | Emerging Markets vs. Ab Global E | Emerging Markets vs. Ab Global E | Emerging Markets 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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