Correlation Between Ab Global and Omni Small-cap
Can any of the company-specific risk be diversified away by investing in both Ab Global and Omni Small-cap 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 Global and Omni Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Omni Small Cap Value, you can compare the effects of market volatilities on Ab Global and Omni Small-cap 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 Global with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Omni Small-cap.
Diversification Opportunities for Ab Global and Omni Small-cap
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CABIX and Omni is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Ab Global 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 Global Risk are associated (or correlated) with Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Ab Global i.e., Ab Global and Omni Small-cap go up and down completely randomly.
Pair Corralation between Ab Global and Omni Small-cap
Assuming the 90 days horizon Ab Global is expected to generate 6.94 times less return on investment than Omni Small-cap. But when comparing it to its historical volatility, Ab Global Risk is 4.42 times less risky than Omni Small-cap. It trades about 0.13 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,974 in Omni Small Cap Value on August 31, 2024 and sell it today you would earn a total of 163.00 from holding Omni Small Cap Value or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Omni Small Cap Value
Performance |
| Timeline |
| Ab Global Risk |
| Omni Small Cap |
Ab Global and Omni Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Omni Small-cap
The main advantage of trading using opposite Ab Global and Omni Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Omni Small-cap 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 Omni Small-cap will offset losses from the drop in Omni Small-cap's long position.| Ab Global vs. All Asset Fund | Ab Global vs. Pimco All Asset | Ab Global vs. All Asset Fund | Ab Global vs. Pimco All Asset |
| Omni Small-cap vs. Adams Diversified Equity | Omni Small-cap vs. American Century Diversified | Omni Small-cap vs. Aqr Diversified Arbitrage | Omni Small-cap vs. Principal Lifetime Hybrid |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |