Correlation Between Ab Global and Newfound Risk
Can any of the company-specific risk be diversified away by investing in both Ab Global and Newfound Risk 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 Newfound Risk 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 Newfound Risk Managed, you can compare the effects of market volatilities on Ab Global and Newfound Risk 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 Newfound Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Newfound Risk.
Diversification Opportunities for Ab Global and Newfound Risk
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANAGX and Newfound is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Newfound Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newfound Risk Managed 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 Newfound Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newfound Risk Managed has no effect on the direction of Ab Global i.e., Ab Global and Newfound Risk go up and down completely randomly.
Pair Corralation between Ab Global and Newfound Risk
If you would invest 668.00 in Ab Global Bond on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Ab Global Bond or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Ab Global Bond vs. Newfound Risk Managed
Performance |
| Timeline |
| Ab Global Bond |
| Newfound Risk Managed |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ab Global and Newfound Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Newfound Risk
The main advantage of trading using opposite Ab Global and Newfound Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Newfound Risk 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 Newfound Risk will offset losses from the drop in Newfound Risk's long position.| Ab Global vs. Vanguard Total International | Ab Global vs. Vanguard Total International | Ab Global vs. Vanguard Total International | Ab Global vs. Vanguard Total International |
| Newfound Risk vs. Ridgeworth Seix Government | Newfound Risk vs. Hsbc Government Money | Newfound Risk vs. Payden Government Fund | Newfound Risk vs. Goldman Sachs Government |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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