Correlation Between Ab Global and Catalystmap Global
Can any of the company-specific risk be diversified away by investing in both Ab Global and Catalystmap Global 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 Catalystmap Global 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 Catalystmap Global Balanced, you can compare the effects of market volatilities on Ab Global and Catalystmap Global 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 Catalystmap Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Catalystmap Global.
Diversification Opportunities for Ab Global and Catalystmap Global
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANAGX and Catalystmap is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global 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 Catalystmap Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global has no effect on the direction of Ab Global i.e., Ab Global and Catalystmap Global go up and down completely randomly.
Pair Corralation between Ab Global and Catalystmap Global
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.78 times more return on investment than Catalystmap Global. However, Ab Global Bond is 1.28 times less risky than Catalystmap Global. It trades about 0.11 of its potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.04 per unit of risk. If you would invest 633.00 in Ab Global Bond on September 12, 2024 and sell it today you would earn a total of 64.00 from holding Ab Global Bond or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Catalystmap Global Balanced
Performance |
| Timeline |
| Ab Global Bond |
| Catalystmap Global |
Ab Global and Catalystmap Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Catalystmap Global
The main advantage of trading using opposite Ab Global and Catalystmap Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Catalystmap Global 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 Catalystmap Global will offset losses from the drop in Catalystmap Global'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 |
| Catalystmap Global vs. Mirova Global Green | Catalystmap Global vs. 361 Global Longshort | Catalystmap Global vs. Ab Global Bond | Catalystmap Global vs. Artisan Global Unconstrained |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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