Correlation Between Dana Large and Ab Impact
Can any of the company-specific risk be diversified away by investing in both Dana Large and Ab Impact 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 Dana Large and Ab Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Ab Impact Municipal, you can compare the effects of market volatilities on Dana Large and Ab Impact 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 Dana Large with a short position of Ab Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Ab Impact.
Diversification Opportunities for Dana Large and Ab Impact
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dana and ABIMX is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Ab Impact Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Impact Municipal and Dana Large 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 Dana Large Cap are associated (or correlated) with Ab Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Impact Municipal has no effect on the direction of Dana Large i.e., Dana Large and Ab Impact go up and down completely randomly.
Pair Corralation between Dana Large and Ab Impact
Assuming the 90 days horizon Dana Large Cap is expected to generate 2.43 times more return on investment than Ab Impact. However, Dana Large is 2.43 times more volatile than Ab Impact Municipal. It trades about 0.15 of its potential returns per unit of risk. Ab Impact Municipal is currently generating about 0.16 per unit of risk. If you would invest 2,599 in Dana Large Cap on August 24, 2024 and sell it today you would earn a total of 81.00 from holding Dana Large Cap or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dana Large Cap vs. Ab Impact Municipal
Performance |
| Timeline |
| Dana Large Cap |
| Ab Impact Municipal |
Dana Large and Ab Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Ab Impact
The main advantage of trading using opposite Dana Large and Ab Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Ab Impact 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 Impact will offset losses from the drop in Ab Impact's long position.| Dana Large vs. Rbb Fund | Dana Large vs. Rbc Microcap Value | Dana Large vs. Aam Select Income | Dana Large vs. Iaadx |
| Ab Impact vs. Angel Oak Ultrashort | Ab Impact vs. Siit Ultra Short | Ab Impact vs. Nuveen Short Term | Ab Impact vs. Jhancock Short Duration |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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