Correlation Between Ab Select and Matthews Asian
Can any of the company-specific risk be diversified away by investing in both Ab Select and Matthews Asian 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 Select and Matthews Asian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Matthews Asian Growth, you can compare the effects of market volatilities on Ab Select and Matthews Asian 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 Select with a short position of Matthews Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Matthews Asian.
Diversification Opportunities for Ab Select and Matthews Asian
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASCLX and Matthews is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Matthews Asian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asian Growth and Ab Select 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 Select Longshort are associated (or correlated) with Matthews Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asian Growth has no effect on the direction of Ab Select i.e., Ab Select and Matthews Asian go up and down completely randomly.
Pair Corralation between Ab Select and Matthews Asian
Assuming the 90 days horizon Ab Select Longshort is expected to generate 0.61 times more return on investment than Matthews Asian. However, Ab Select Longshort is 1.63 times less risky than Matthews Asian. It trades about 0.12 of its potential returns per unit of risk. Matthews Asian Growth is currently generating about 0.03 per unit of risk. If you would invest 1,076 in Ab Select Longshort on August 30, 2024 and sell it today you would earn a total of 327.00 from holding Ab Select Longshort or generate 30.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Matthews Asian Growth
Performance |
| Timeline |
| Ab Select Longshort |
| Matthews Asian Growth |
Ab Select and Matthews Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Matthews Asian
The main advantage of trading using opposite Ab Select and Matthews Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Matthews Asian 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 Matthews Asian will offset losses from the drop in Matthews Asian's long position.| Ab Select vs. Neuberger Berman Long | Ab Select vs. Neuberger Berman Long | Ab Select vs. Pimco Rae Worldwide |
| Matthews Asian vs. Vanguard Emerging Markets | Matthews Asian vs. Blrc Sgy Mnp | Matthews Asian vs. Ab Select Longshort | Matthews Asian vs. California Bond Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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