Correlation Between Ab Global and Global Bond
Can any of the company-specific risk be diversified away by investing in both Ab Global and Global Bond 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 Global and Global Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Global Bond Fund, you can compare the effects of market volatilities on Ab Global and Global Bond 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 Global with a short position of Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Global Bond.
Diversification Opportunities for Ab Global and Global Bond
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ANAGX and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund and Ab Global 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 Global Bond are associated (or correlated) with Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Ab Global i.e., Ab Global and Global Bond go up and down completely randomly.
Pair Corralation between Ab Global and Global Bond
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.85 times more return on investment than Global Bond. However, Ab Global Bond is 1.17 times less risky than Global Bond. It trades about 0.08 of its potential returns per unit of risk. Global Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 644.00 in Ab Global Bond on September 4, 2024 and sell it today you would earn a total of 53.00 from holding Ab Global Bond or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Global Bond Fund
Performance |
| Timeline |
| Ab Global Bond |
| Global Bond Fund |
Ab Global and Global Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Global Bond
The main advantage of trading using opposite Ab Global and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Global Bond 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 Global Bond will offset losses from the drop in Global Bond's long position.| Ab Global vs. Lord Abbett Convertible | Ab Global vs. Virtus Convertible | Ab Global vs. Rationalpier 88 Convertible | Ab Global vs. Advent Claymore Convertible |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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