Correlation Between Ab Global and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Global 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 Global Bond and Emerging Markets Bond, you can compare the effects of market volatilities on Ab Global 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 Global with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Emerging Markets.
Diversification Opportunities for Ab Global and Emerging Markets
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ANAGX and Emerging is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Emerging Markets Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Bond 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 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 Bond has no effect on the direction of Ab Global i.e., Ab Global and Emerging Markets go up and down completely randomly.
Pair Corralation between Ab Global and Emerging Markets
Assuming the 90 days horizon Ab Global is expected to generate 2.43 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Ab Global Bond is 1.29 times less risky than Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Emerging Markets Bond is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 788.00 in Emerging Markets Bond on September 14, 2024 and sell it today you would earn a total of 74.00 from holding Emerging Markets Bond or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Emerging Markets Bond
Performance |
| Timeline |
| Ab Global Bond |
| Emerging Markets Bond |
Ab Global and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Emerging Markets
The main advantage of trading using opposite Ab Global and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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 Global vs. James Balanced Golden | Ab Global vs. Gabelli Gold Fund | Ab Global vs. Fidelity Advisor Gold | Ab Global vs. International Investors Gold |
| Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |