Correlation Between Ab Select and Grant Park
Can any of the company-specific risk be diversified away by investing in both Ab Select and Grant Park 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 Grant Park 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 Grant Park Multi, you can compare the effects of market volatilities on Ab Select and Grant Park 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 Grant Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Grant Park.
Diversification Opportunities for Ab Select and Grant Park
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AUUIX and Grant is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Grant Park Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grant Park Multi 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 Grant Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grant Park Multi has no effect on the direction of Ab Select i.e., Ab Select and Grant Park go up and down completely randomly.
Pair Corralation between Ab Select and Grant Park
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.86 times more return on investment than Grant Park. However, Ab Select is 1.86 times more volatile than Grant Park Multi. It trades about 0.12 of its potential returns per unit of risk. Grant Park Multi is currently generating about 0.02 per unit of risk. If you would invest 1,602 in Ab Select Equity on September 3, 2024 and sell it today you would earn a total of 808.00 from holding Ab Select Equity or generate 50.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Grant Park Multi
Performance |
| Timeline |
| Ab Select Equity |
| Grant Park Multi |
Ab Select and Grant Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Grant Park
The main advantage of trading using opposite Ab Select and Grant Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Grant Park 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 Grant Park will offset losses from the drop in Grant Park's long position.| Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard 500 Index | Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard Total Stock |
| Grant Park vs. Jpmorgan Equity Income | Grant Park vs. Us Strategic Equity | Grant Park vs. Cutler Equity | Grant Park vs. Ab Select Equity |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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