Correlation Between Ab Global and Lifex Income
Can any of the company-specific risk be diversified away by investing in both Ab Global and Lifex Income 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 Lifex Income 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 Lifex Income, you can compare the effects of market volatilities on Ab Global and Lifex Income 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 Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Lifex Income.
Diversification Opportunities for Ab Global and Lifex Income
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ANAYX and Lifex is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income 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 Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of Ab Global i.e., Ab Global and Lifex Income go up and down completely randomly.
Pair Corralation between Ab Global and Lifex Income
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.34 times more return on investment than Lifex Income. However, Ab Global Bond is 2.95 times less risky than Lifex Income. It trades about 0.12 of its potential returns per unit of risk. Lifex Income is currently generating about 0.03 per unit of risk. If you would invest 670.00 in Ab Global Bond on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Ab Global Bond or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Lifex Income
Performance |
| Timeline |
| Ab Global Bond |
| Lifex Income |
Ab Global and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Lifex Income
The main advantage of trading using opposite Ab Global and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Lifex Income 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 Lifex Income will offset losses from the drop in Lifex Income's long position.| Ab Global vs. Goldman Sachs Technology | Ab Global vs. Icon Information Technology | Ab Global vs. Goldman Sachs Technology | Ab Global vs. Janus Global Technology |
| Lifex Income vs. Thrivent Income Fund | Lifex Income vs. Maryland Tax Free Bond | Lifex Income vs. T Rowe Price | Lifex Income vs. Ab Global Bond |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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