Correlation Between Ab Select and Stock Index
Can any of the company-specific risk be diversified away by investing in both Ab Select and Stock Index 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 Stock Index 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 Stock Index Fund, you can compare the effects of market volatilities on Ab Select and Stock Index 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 Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Stock Index.
Diversification Opportunities for Ab Select and Stock Index
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between AUUIX and Stock is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund 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 Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Ab Select i.e., Ab Select and Stock Index go up and down completely randomly.
Pair Corralation between Ab Select and Stock Index
Assuming the 90 days horizon Ab Select is expected to generate 1.34 times less return on investment than Stock Index. But when comparing it to its historical volatility, Ab Select Equity is 1.02 times less risky than Stock Index. It trades about 0.08 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,949 in Stock Index Fund on October 7, 2024 and sell it today you would earn a total of 2,064 from holding Stock Index Fund or generate 52.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Stock Index Fund
Performance |
| Timeline |
| Ab Select Equity |
| Stock Index Fund |
Ab Select and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Stock Index
The main advantage of trading using opposite Ab Select and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index'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 |
| Stock Index vs. Europac Gold Fund | Stock Index vs. International Investors Gold | Stock Index vs. Precious Metals And | Stock Index vs. Great West Goldman Sachs |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |