Correlation Between Ab Select and Applied Finance
Can any of the company-specific risk be diversified away by investing in both Ab Select and Applied Finance 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 Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Applied Finance Core, you can compare the effects of market volatilities on Ab Select and Applied Finance 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 Applied Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Applied Finance.
Diversification Opportunities for Ab Select and Applied Finance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AUUIX and Applied is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Applied Finance Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Core 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 Equity are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Core has no effect on the direction of Ab Select i.e., Ab Select and Applied Finance go up and down completely randomly.
Pair Corralation between Ab Select and Applied Finance
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.01 times more return on investment than Applied Finance. However, Ab Select is 1.01 times more volatile than Applied Finance Core. It trades about 0.18 of its potential returns per unit of risk. Applied Finance Core is currently generating about 0.14 per unit of risk. If you would invest 1,786 in Ab Select Equity on September 2, 2024 and sell it today you would earn a total of 624.00 from holding Ab Select Equity or generate 34.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Applied Finance Core
Performance |
| Timeline |
| Ab Select Equity |
| Applied Finance Core |
Ab Select and Applied Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Applied Finance
The main advantage of trading using opposite Ab Select and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.| Ab Select vs. Oppenheimer International Diversified | Ab Select vs. Tax Managed Mid Small | Ab Select vs. Davenport Small Cap | Ab Select vs. Small Cap Stock |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets |