Correlation Between Ab Global and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Ab Global and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Muni, you can compare the effects of market volatilities on Ab Global and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Transamerica Intermediate.
Diversification Opportunities for Ab Global and Transamerica Intermediate
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ANAGX and Transamerica is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Ab Global i.e., Ab Global and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Ab Global and Transamerica Intermediate
Assuming the 90 days horizon Ab Global Bond is expected to generate 1.09 times more return on investment than Transamerica Intermediate. However, Ab Global is 1.09 times more volatile than Transamerica Intermediate Muni. It trades about 0.06 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.02 per unit of risk. If you would invest 684.00 in Ab Global Bond on October 26, 2024 and sell it today you would earn a total of 2.00 from holding Ab Global Bond or generate 0.29% 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. Transamerica Intermediate Muni
Performance |
| Timeline |
| Ab Global Bond |
| Transamerica Intermediate |
Ab Global and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Transamerica Intermediate
The main advantage of trading using opposite Ab Global and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Ab Global vs. Prudential High Yield | Ab Global vs. Neuberger Berman Income | Ab Global vs. Lord Abbett Short | Ab Global vs. Siit High Yield |
| Transamerica Intermediate vs. Virtus High Yield | Transamerica Intermediate vs. Msift High Yield | Transamerica Intermediate vs. Transamerica High Yield | Transamerica Intermediate vs. Gmo High Yield |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |