Correlation Between Ab Select and State Street
Can any of the company-specific risk be diversified away by investing in both Ab Select and State Street 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 State Street 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 State Street Aggregate, you can compare the effects of market volatilities on Ab Select and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and State Street.
Diversification Opportunities for Ab Select and State Street
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ASCLX and STATE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and State Street Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Aggregate 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Aggregate has no effect on the direction of Ab Select i.e., Ab Select and State Street go up and down completely randomly.
Pair Corralation between Ab Select and State Street
Assuming the 90 days horizon Ab Select Longshort is expected to generate 1.13 times more return on investment than State Street. However, Ab Select is 1.13 times more volatile than State Street Aggregate. It trades about 0.12 of its potential returns per unit of risk. State Street Aggregate is currently generating about 0.03 per unit of risk. If you would invest 1,081 in Ab Select Longshort on August 29, 2024 and sell it today you would earn a total of 322.00 from holding Ab Select Longshort or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. State Street Aggregate
Performance |
| Timeline |
| Ab Select Longshort |
| State Street Aggregate |
Ab Select and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and State Street
The main advantage of trading using opposite Ab Select and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Ab Select vs. Neuberger Berman Long | Ab Select vs. Neuberger Berman Long | Ab Select vs. Pimco Rae Worldwide |
| State Street vs. Calvert Short Duration | State Street vs. Federated Short Intermediate Duration | State Street vs. Ab Select Longshort | State Street vs. Siit Ultra Short |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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