Correlation Between Bumble and AB International
Can any of the company-specific risk be diversified away by investing in both Bumble and AB International 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 Bumble and AB International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumble Inc and AB International Group, you can compare the effects of market volatilities on Bumble and AB International 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 Bumble with a short position of AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumble and AB International.
Diversification Opportunities for Bumble and AB International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bumble and ABQQ is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bumble Inc and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International and Bumble 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 Bumble Inc are associated (or correlated) with AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of Bumble i.e., Bumble and AB International go up and down completely randomly.
Pair Corralation between Bumble and AB International
Given the investment horizon of 90 days Bumble Inc is expected to generate 0.23 times more return on investment than AB International. However, Bumble Inc is 4.41 times less risky than AB International. It trades about -0.05 of its potential returns per unit of risk. AB International Group is currently generating about -0.17 per unit of risk. If you would invest 788.00 in Bumble Inc on October 23, 2024 and sell it today you would lose (22.00) from holding Bumble Inc or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumble Inc vs. AB International Group
Performance |
| Timeline |
| Bumble Inc |
| AB International |
Bumble and AB International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumble and AB International
The main advantage of trading using opposite Bumble and AB International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumble position performs unexpectedly, AB International 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 AB International will offset losses from the drop in AB International's long position.The idea behind Bumble Inc and AB International Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AB International vs. Peer To Peer | AB International vs. AppYea Inc | AB International vs. Image Protect | AB International vs. Bowmo Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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