Correlation Between Ab Global and Eagle Mid

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ab Global and Eagle Mid 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 Eagle Mid 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 Eagle Mid Cap, you can compare the effects of market volatilities on Ab Global and Eagle Mid 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 Eagle Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Eagle Mid.

Diversification Opportunities for Ab Global and Eagle Mid

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between CABIX and EAGLE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid 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 Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Ab Global i.e., Ab Global and Eagle Mid go up and down completely randomly.

Pair Corralation between Ab Global and Eagle Mid

Assuming the 90 days horizon Ab Global is expected to generate 1.11 times less return on investment than Eagle Mid. But when comparing it to its historical volatility, Ab Global Risk is 2.41 times less risky than Eagle Mid. It trades about 0.11 of its potential returns per unit of risk. Eagle Mid Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8,155  in Eagle Mid Cap on September 5, 2024 and sell it today you would earn a total of  1,202  from holding Eagle Mid Cap or generate 14.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ab Global Risk  vs.  Eagle Mid Cap

 Performance 
       Timeline  
Ab Global Risk 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global Risk are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Eagle Mid Cap 

Risk-Adjusted Performance

24 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mid Cap are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eagle Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Ab Global and Eagle Mid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ab Global and Eagle Mid

The main advantage of trading using opposite Ab Global and Eagle Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Eagle Mid 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 Eagle Mid will offset losses from the drop in Eagle Mid's long position.
The idea behind Ab Global Risk and Eagle Mid Cap 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios