Correlation Between Ab Global and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Global and Prudential Emerging 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 Prudential Emerging 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 Prudential Emerging Markets, you can compare the effects of market volatilities on Ab Global and Prudential Emerging 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 Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Prudential Emerging.
Diversification Opportunities for Ab Global and Prudential Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ANAZX and Prudential is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging 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 Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Ab Global i.e., Ab Global and Prudential Emerging go up and down completely randomly.
Pair Corralation between Ab Global and Prudential Emerging
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.42 times more return on investment than Prudential Emerging. However, Ab Global Bond is 2.4 times less risky than Prudential Emerging. It trades about -0.03 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about -0.12 per unit of risk. If you would invest 690.00 in Ab Global Bond on August 26, 2024 and sell it today you would lose (1.00) from holding Ab Global Bond or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Prudential Emerging Markets
Performance |
| Timeline |
| Ab Global Bond |
| Prudential Emerging |
Ab Global and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Prudential Emerging
The main advantage of trading using opposite Ab Global and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Prudential Emerging 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio |
| Prudential Emerging vs. Ab Global Bond | Prudential Emerging vs. T Rowe Price | Prudential Emerging vs. Artisan Global Unconstrained | Prudential Emerging vs. Us Global Investors |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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