Correlation Between Ab Global and Simt Multi
Can any of the company-specific risk be diversified away by investing in both Ab Global and Simt Multi 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 Simt Multi 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 Simt Multi Strategy Alternative, you can compare the effects of market volatilities on Ab Global and Simt Multi 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 Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Simt Multi.
Diversification Opportunities for Ab Global and Simt Multi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CABIX and Simt is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Simt Multi Strategy Alternativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Strategy 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 Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Strategy has no effect on the direction of Ab Global i.e., Ab Global and Simt Multi go up and down completely randomly.
Pair Corralation between Ab Global and Simt Multi
Assuming the 90 days horizon Ab Global Risk is expected to generate 1.0 times more return on investment than Simt Multi. However, Ab Global Risk is 1.0 times less risky than Simt Multi. It trades about 0.48 of its potential returns per unit of risk. Simt Multi Strategy Alternative is currently generating about 0.19 per unit of risk. If you would invest 1,767 in Ab Global Risk on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Ab Global Risk or generate 2.55% 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. Simt Multi Strategy Alternativ
Performance |
| Timeline |
| Ab Global Risk |
| Simt Multi Strategy |
Ab Global and Simt Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Simt Multi
The main advantage of trading using opposite Ab Global and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Simt Multi 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 Simt Multi will offset losses from the drop in Simt Multi's long position.| Ab Global vs. Elfun Government Money | Ab Global vs. Franklin Government Money | Ab Global vs. Money Market Obligations | Ab Global vs. Blackrock Exchange Portfolio |
| Simt Multi vs. Simt Multi Asset Accumulation | Simt Multi vs. Saat Market Growth | Simt Multi vs. Simt Real Return | Simt Multi vs. Simt Small Cap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
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| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
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| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |