Correlation Between Ab Global and Icon Bond
Can any of the company-specific risk be diversified away by investing in both Ab Global and Icon Bond 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 Icon Bond 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 Icon Bond Fund, you can compare the effects of market volatilities on Ab Global and Icon Bond 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 Icon Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Icon Bond.
Diversification Opportunities for Ab Global and Icon Bond
Poor diversification
The 3 months correlation between CABIX and Icon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Icon Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Bond Fund 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 Icon Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Bond Fund has no effect on the direction of Ab Global i.e., Ab Global and Icon Bond go up and down completely randomly.
Pair Corralation between Ab Global and Icon Bond
Assuming the 90 days horizon Ab Global Risk is expected to generate 3.4 times more return on investment than Icon Bond. However, Ab Global is 3.4 times more volatile than Icon Bond Fund. It trades about 0.1 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.16 per unit of risk. If you would invest 1,757 in Ab Global Risk on September 4, 2024 and sell it today you would earn a total of 45.00 from holding Ab Global Risk or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Icon Bond Fund
Performance |
| Timeline |
| Ab Global Risk |
| Icon Bond Fund |
Ab Global and Icon Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Icon Bond
The main advantage of trading using opposite Ab Global and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Icon Bond 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 Icon Bond will offset losses from the drop in Icon Bond's long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab Minnesota Portfolio |
| Icon Bond vs. Ab Global Risk | Icon Bond vs. 361 Global Longshort | Icon Bond vs. Barings Global Floating | Icon Bond vs. Ab Global Real |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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