Correlation Between Commonwealth Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Commonwealth Global and Ab Global 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 Commonwealth Global and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Global Fund and Ab Global Real, you can compare the effects of market volatilities on Commonwealth Global and Ab Global 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 Commonwealth Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Global and Ab Global.
Diversification Opportunities for Commonwealth Global and Ab Global
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Commonwealth and ARECX is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Commonwealth 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 Commonwealth Global Fund are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Commonwealth Global i.e., Commonwealth Global and Ab Global go up and down completely randomly.
Pair Corralation between Commonwealth Global and Ab Global
Assuming the 90 days horizon Commonwealth Global Fund is expected to generate 0.94 times more return on investment than Ab Global. However, Commonwealth Global Fund is 1.07 times less risky than Ab Global. It trades about -0.01 of its potential returns per unit of risk. Ab Global Real is currently generating about -0.1 per unit of risk. If you would invest 2,113 in Commonwealth Global Fund on August 24, 2024 and sell it today you would lose (6.00) from holding Commonwealth Global Fund or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Global Fund vs. Ab Global Real
Performance |
| Timeline |
| Commonwealth Global |
| Ab Global Real |
Commonwealth Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Global and Ab Global
The main advantage of trading using opposite Commonwealth Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Global position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Commonwealth Global vs. Commonwealth Real Estate | Commonwealth Global vs. Gamco Global Opportunity | Commonwealth Global vs. Buffalo Growth Fund | Commonwealth Global vs. HUMANA INC |
| Ab Global vs. Aqr Large Cap | Ab Global vs. Nuveen Winslow Large Cap | Ab Global vs. William Blair Large | Ab Global vs. Goldman Sachs Large |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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