Correlation Between Auer Growth and Ab Value
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Ab Value 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 Auer Growth and Ab Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Ab Value Fund, you can compare the effects of market volatilities on Auer Growth and Ab Value 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 Auer Growth with a short position of Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Ab Value.
Diversification Opportunities for Auer Growth and Ab Value
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and ABVCX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Auer Growth i.e., Auer Growth and Ab Value go up and down completely randomly.
Pair Corralation between Auer Growth and Ab Value
Assuming the 90 days horizon Auer Growth is expected to generate 1.49 times less return on investment than Ab Value. In addition to that, Auer Growth is 1.13 times more volatile than Ab Value Fund. It trades about 0.26 of its total potential returns per unit of risk. Ab Value Fund is currently generating about 0.44 per unit of volatility. If you would invest 1,928 in Ab Value Fund on September 4, 2024 and sell it today you would earn a total of 148.00 from holding Ab Value Fund or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Auer Growth Fund vs. Ab Value Fund
Performance |
| Timeline |
| Auer Growth Fund |
| Ab Value Fund |
Auer Growth and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Ab Value
The main advantage of trading using opposite Auer Growth and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Ab Value 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 Value will offset losses from the drop in Ab Value's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Ab Value vs. Balanced Fund Investor | Ab Value vs. T Rowe Price | Ab Value vs. Ab Small Cap | Ab Value vs. Qs Growth 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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