Correlation Between Ab Global and Bts Managed
Can any of the company-specific risk be diversified away by investing in both Ab Global and Bts Managed 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 Bts Managed 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 Bts Managed Income, you can compare the effects of market volatilities on Ab Global and Bts Managed 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 Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Bts Managed.
Diversification Opportunities for Ab Global and Bts Managed
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CABIX and Bts is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income 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 Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Ab Global i.e., Ab Global and Bts Managed go up and down completely randomly.
Pair Corralation between Ab Global and Bts Managed
Assuming the 90 days horizon Ab Global Risk is expected to generate 1.72 times more return on investment than Bts Managed. However, Ab Global is 1.72 times more volatile than Bts Managed Income. It trades about 0.37 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.47 per unit of risk. If you would invest 1,752 in Ab Global Risk on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Ab Global Risk or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Bts Managed Income
Performance |
| Timeline |
| Ab Global Risk |
| Bts Managed Income |
Ab Global and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Bts Managed
The main advantage of trading using opposite Ab Global and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| Ab Global vs. Allianzgi Convertible Income | Ab Global vs. The Gamco Global | Ab Global vs. Harbor Vertible Securities | Ab Global vs. Advent Claymore Convertible |
| Bts Managed vs. Pioneer High Yield | Bts Managed vs. Siit High Yield | Bts Managed vs. Ab Global Risk | Bts Managed vs. Federated Institutional High |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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