Correlation Between Ab Select and Asia Opportunity
Can any of the company-specific risk be diversified away by investing in both Ab Select and Asia Opportunity 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 Asia Opportunity 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 Asia Opportunity Portfolio, you can compare the effects of market volatilities on Ab Select and Asia Opportunity 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 Asia Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Asia Opportunity.
Diversification Opportunities for Ab Select and Asia Opportunity
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUUIX and Asia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Asia Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Opportunity Por 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 Asia Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Opportunity Por has no effect on the direction of Ab Select i.e., Ab Select and Asia Opportunity go up and down completely randomly.
Pair Corralation between Ab Select and Asia Opportunity
Assuming the 90 days horizon Ab Select Equity is expected to generate 0.81 times more return on investment than Asia Opportunity. However, Ab Select Equity is 1.24 times less risky than Asia Opportunity. It trades about 0.08 of its potential returns per unit of risk. Asia Opportunity Portfolio is currently generating about -0.29 per unit of risk. If you would invest 2,184 in Ab Select Equity on October 23, 2024 and sell it today you would earn a total of 23.00 from holding Ab Select Equity or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Asia Opportunity Portfolio
Performance |
| Timeline |
| Ab Select Equity |
| Asia Opportunity Por |
Ab Select and Asia Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Asia Opportunity
The main advantage of trading using opposite Ab Select and Asia Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Asia Opportunity 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 Asia Opportunity will offset losses from the drop in Asia Opportunity's long position.| Ab Select vs. Vanguard Short Term Government | Ab Select vs. Franklin Adjustable Government | Ab Select vs. Blackrock Pa Muni | Ab Select vs. Dws Government Money |
| Asia Opportunity vs. Emerging Markets Equity | Asia Opportunity vs. Global Fixed Income | Asia Opportunity vs. Global Fixed Income | Asia Opportunity vs. Global Fixed 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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