Correlation Between Ab Bond and Anchor Risk
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Anchor Risk 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 Bond and Anchor Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Anchor Risk Managed, you can compare the effects of market volatilities on Ab Bond and Anchor Risk 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 Bond with a short position of Anchor Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Anchor Risk.
Diversification Opportunities for Ab Bond and Anchor Risk
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANBIX and Anchor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Anchor Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Risk Managed and Ab Bond 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 Bond Inflation are associated (or correlated) with Anchor Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Risk Managed has no effect on the direction of Ab Bond i.e., Ab Bond and Anchor Risk go up and down completely randomly.
Pair Corralation between Ab Bond and Anchor Risk
Assuming the 90 days horizon Ab Bond is expected to generate 2.17 times less return on investment than Anchor Risk. But when comparing it to its historical volatility, Ab Bond Inflation is 2.15 times less risky than Anchor Risk. It trades about 0.21 of its potential returns per unit of risk. Anchor Risk Managed is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Anchor Risk Managed on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Anchor Risk Managed or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Bond Inflation vs. Anchor Risk Managed
Performance |
| Timeline |
| Ab Bond Inflation |
| Anchor Risk Managed |
Ab Bond and Anchor Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Anchor Risk
The main advantage of trading using opposite Ab Bond and Anchor Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Anchor Risk 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 Anchor Risk will offset losses from the drop in Anchor Risk's long position.| Ab Bond vs. Fidelity Sai Convertible | Ab Bond vs. Putnam Convertible Incm Gwth | Ab Bond vs. Calamos Dynamic Convertible | Ab Bond vs. Advent Claymore Convertible |
| Anchor Risk vs. Anchor Tactical Credit | Anchor Risk vs. Catalystmillburn Hedge Strategy | Anchor Risk vs. Kensington Managed Income | Anchor Risk vs. Anchor Risk Managed |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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