Correlation Between Ab Global and Locorr Macro
Can any of the company-specific risk be diversified away by investing in both Ab Global and Locorr Macro 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 Locorr Macro 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 Locorr Macro Strategies, you can compare the effects of market volatilities on Ab Global and Locorr Macro 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 Locorr Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Locorr Macro.
Diversification Opportunities for Ab Global and Locorr Macro
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANAGX and Locorr is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Locorr Macro Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Macro Strategies 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 Locorr Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Macro Strategies has no effect on the direction of Ab Global i.e., Ab Global and Locorr Macro go up and down completely randomly.
Pair Corralation between Ab Global and Locorr Macro
Assuming the 90 days horizon Ab Global is expected to generate 12.94 times less return on investment than Locorr Macro. But when comparing it to its historical volatility, Ab Global Bond is 1.18 times less risky than Locorr Macro. It trades about 0.03 of its potential returns per unit of risk. Locorr Macro Strategies is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Locorr Macro Strategies on October 23, 2024 and sell it today you would earn a total of 15.00 from holding Locorr Macro Strategies or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Locorr Macro Strategies
Performance |
| Timeline |
| Ab Global Bond |
| Locorr Macro Strategies |
Ab Global and Locorr Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Locorr Macro
The main advantage of trading using opposite Ab Global and Locorr Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Locorr Macro 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 Locorr Macro will offset losses from the drop in Locorr Macro's long position.| Ab Global vs. Bbh Intermediate Municipal | Ab Global vs. Leader Short Term Bond | Ab Global vs. Gmo High Yield | Ab Global vs. Multisector Bond Sma |
| Locorr Macro vs. Ab Global Bond | Locorr Macro vs. Tax Managed Large Cap | Locorr Macro vs. T Rowe Price | Locorr Macro vs. Qs Global Equity |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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