Correlation Between Ab Sustainable and Ab Growth
Can any of the company-specific risk be diversified away by investing in both Ab Sustainable and Ab Growth 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 Sustainable and Ab Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Sustainable Global and Ab Growth Fund, you can compare the effects of market volatilities on Ab Sustainable and Ab Growth 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 Sustainable with a short position of Ab Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Sustainable and Ab Growth.
Diversification Opportunities for Ab Sustainable and Ab Growth
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATEYX and AGRCX is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ab Sustainable Global and Ab Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Growth Fund and Ab Sustainable 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 Sustainable Global are associated (or correlated) with Ab Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Growth Fund has no effect on the direction of Ab Sustainable i.e., Ab Sustainable and Ab Growth go up and down completely randomly.
Pair Corralation between Ab Sustainable and Ab Growth
Assuming the 90 days horizon Ab Sustainable Global is expected to generate 0.12 times more return on investment than Ab Growth. However, Ab Sustainable Global is 8.46 times less risky than Ab Growth. It trades about -0.19 of its potential returns per unit of risk. Ab Growth Fund is currently generating about -0.2 per unit of risk. If you would invest 17,605 in Ab Sustainable Global on September 13, 2024 and sell it today you would lose (1,246) from holding Ab Sustainable Global or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Sustainable Global vs. Ab Growth Fund
Performance |
| Timeline |
| Ab Sustainable Global |
| Ab Growth Fund |
Ab Sustainable and Ab Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Sustainable and Ab Growth
The main advantage of trading using opposite Ab Sustainable and Ab Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Sustainable position performs unexpectedly, Ab Growth 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 Growth will offset losses from the drop in Ab Growth's long position.| Ab Sustainable vs. Money Market Obligations | Ab Sustainable vs. Prudential Government Money | Ab Sustainable vs. Elfun Government Money | Ab Sustainable vs. Cref Money Market |
| Ab Growth vs. Ab Small Cap | Ab Growth vs. Ab Sustainable Global | Ab Growth vs. Ab Relative Value | Ab Growth vs. Jpmorgan Equity Income |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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