Correlation Between Ab Select and American Funds
Can any of the company-specific risk be diversified away by investing in both Ab Select and American Funds 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 American Funds 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 American Funds Preservation, you can compare the effects of market volatilities on Ab Select and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and American Funds.
Diversification Opportunities for Ab Select and American Funds
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AUUIX and American is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and American Funds Preservation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Prese 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Prese has no effect on the direction of Ab Select i.e., Ab Select and American Funds go up and down completely randomly.
Pair Corralation between Ab Select and American Funds
Assuming the 90 days horizon Ab Select Equity is expected to under-perform the American Funds. In addition to that, Ab Select is 13.38 times more volatile than American Funds Preservation. It trades about -0.03 of its total potential returns per unit of risk. American Funds Preservation is currently generating about -0.07 per unit of volatility. If you would invest 949.00 in American Funds Preservation on January 12, 2025 and sell it today you would lose (3.00) from holding American Funds Preservation or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. American Funds Preservation
Performance |
| Timeline |
| Ab Select Equity |
| American Funds Prese |
Ab Select and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and American Funds
The main advantage of trading using opposite Ab Select and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Ab Select vs. Rationalpier 88 Convertible | Ab Select vs. Advent Claymore Convertible | Ab Select vs. Calamos Dynamic Convertible | Ab Select vs. Absolute Convertible Arbitrage |
| American Funds vs. Us Government Securities | American Funds vs. Us Government Securities | American Funds vs. Short Term Government Fund | American Funds vs. Virtus Seix Government |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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