Correlation Between Horizon Active and Ab Global
Can any of the company-specific risk be diversified away by investing in both Horizon Active and Ab 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 Horizon Active and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Active Risk and Ab Global Real, you can compare the effects of market volatilities on Horizon Active and Ab 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 Horizon Active with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Ab Global.
Diversification Opportunities for Horizon Active and Ab Global
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Horizon and ARECX is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Risk and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Horizon Active 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 Horizon Active Risk are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Horizon Active i.e., Horizon Active and Ab Global go up and down completely randomly.
Pair Corralation between Horizon Active and Ab Global
Assuming the 90 days horizon Horizon Active is expected to generate 1.22 times less return on investment than Ab Global. But when comparing it to its historical volatility, Horizon Active Risk is 1.3 times less risky than Ab Global. It trades about 0.09 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,512 in Ab Global Real on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Ab Global Real or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Active Risk vs. Ab Global Real
Performance |
| Timeline |
| Horizon Active Risk |
| Ab Global Real |
Horizon Active and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Active and Ab Global
The main advantage of trading using opposite Horizon Active and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Active position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab Global's long position.| Horizon Active vs. Ab Bond Inflation | Horizon Active vs. Aqr Managed Futures | Horizon Active vs. Blackrock Inflation Protected | Horizon Active vs. Fidelity Advisor 529 |
| Ab Global vs. Harbor Diversified International | Ab Global vs. Fidelity Advisor Diversified | Ab Global vs. Delaware Limited Term Diversified | Ab Global vs. Western Asset Diversified |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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