Correlation Between Ab Select and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Ab Select and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Ab Select and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Growth Opportunities.
Diversification Opportunities for Ab Select and Growth Opportunities
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between AUUIX and Growth is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Ab Select i.e., Ab Select and Growth Opportunities go up and down completely randomly.
Pair Corralation between Ab Select and Growth Opportunities
Assuming the 90 days horizon Ab Select is expected to generate 1.13 times less return on investment than Growth Opportunities. But when comparing it to its historical volatility, Ab Select Equity is 1.34 times less risky than Growth Opportunities. It trades about 0.19 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,459 in Growth Opportunities Fund on August 31, 2024 and sell it today you would earn a total of 210.00 from holding Growth Opportunities Fund or generate 3.85% 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. Growth Opportunities Fund
Performance |
| Timeline |
| Ab Select Equity |
| Growth Opportunities |
Ab Select and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Growth Opportunities
The main advantage of trading using opposite Ab Select and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' long position.| Ab Select vs. Ab Bond Inflation | Ab Select vs. Legg Mason Partners | Ab Select vs. Inflation Protected Bond Fund | Ab Select vs. Artisan High Income |
| Growth Opportunities vs. Ab Select Equity | Growth Opportunities vs. Icon Equity Income | Growth Opportunities vs. Multimedia Portfolio Multimedia | Growth Opportunities vs. Ms Global Fixed |
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.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |