Correlation Between Ab Global and Federated Intermediate
Can any of the company-specific risk be diversified away by investing in both Ab Global and Federated Intermediate 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 Federated Intermediate 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 Federated Intermediate Porate, you can compare the effects of market volatilities on Ab Global and Federated Intermediate 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 Federated Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Federated Intermediate.
Diversification Opportunities for Ab Global and Federated Intermediate
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CABIX and Federated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Federated Intermediate Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Intermediate 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 Federated Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Intermediate has no effect on the direction of Ab Global i.e., Ab Global and Federated Intermediate go up and down completely randomly.
Pair Corralation between Ab Global and Federated Intermediate
Assuming the 90 days horizon Ab Global Risk is expected to generate 1.83 times more return on investment than Federated Intermediate. However, Ab Global is 1.83 times more volatile than Federated Intermediate Porate. It trades about 0.04 of its potential returns per unit of risk. Federated Intermediate Porate is currently generating about 0.06 per unit of risk. If you would invest 1,606 in Ab Global Risk on August 26, 2024 and sell it today you would earn a total of 168.00 from holding Ab Global Risk or generate 10.46% 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. Federated Intermediate Porate
Performance |
| Timeline |
| Ab Global Risk |
| Federated Intermediate |
Ab Global and Federated Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Federated Intermediate
The main advantage of trading using opposite Ab Global and Federated Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Federated Intermediate 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 Federated Intermediate will offset losses from the drop in Federated Intermediate's long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio |
| Federated Intermediate vs. Ab Global Risk | Federated Intermediate vs. Pace High Yield | Federated Intermediate vs. Calvert High Yield | Federated Intermediate vs. Lgm Risk Managed |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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