Correlation Between Ab Select and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Ab Select and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation, you can compare the effects of market volatilities on Ab Select and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Transamerica Asset.
Diversification Opportunities for Ab Select and Transamerica Asset
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUUYX and Transamerica is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Ab Select i.e., Ab Select and Transamerica Asset go up and down completely randomly.
Pair Corralation between Ab Select and Transamerica Asset
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.84 times more return on investment than Transamerica Asset. However, Ab Select is 1.84 times more volatile than Transamerica Asset Allocation. It trades about 0.29 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.29 per unit of risk. If you would invest 2,194 in Ab Select Equity on November 2, 2024 and sell it today you would earn a total of 94.00 from holding Ab Select Equity or generate 4.28% 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. Transamerica Asset Allocation
Performance |
| Timeline |
| Ab Select Equity |
| Transamerica Asset |
Ab Select and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Transamerica Asset
The main advantage of trading using opposite Ab Select and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset's long position.| Ab Select vs. Us Government Securities | Ab Select vs. Inverse Government Long | Ab Select vs. Aig Government Money | Ab Select vs. Great West Government Mortgage |
| Transamerica Asset vs. Nuveen Strategic Municipal | Transamerica Asset vs. Gamco Global Telecommunications | Transamerica Asset vs. Morningstar Municipal Bond | Transamerica Asset vs. Inverse Government Long |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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