Correlation Between Oil Gas and Ab Global
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Ab Global Real, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Ab Global.
Diversification Opportunities for Oil Gas and Ab Global
Excellent diversification
The 3 months correlation between Oil and AREAX is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector 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 Oil Gas 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 Oil Gas Ultrasector 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 Oil Gas i.e., Oil Gas and Ab Global go up and down completely randomly.
Pair Corralation between Oil Gas and Ab Global
Assuming the 90 days horizon Oil Gas is expected to generate 2.16 times less return on investment than Ab Global. In addition to that, Oil Gas is 1.98 times more volatile than Ab Global Real. It trades about 0.01 of its total potential returns per unit of risk. Ab Global Real is currently generating about 0.04 per unit of volatility. If you would invest 1,271 in Ab Global Real on September 13, 2024 and sell it today you would earn a total of 235.00 from holding Ab Global Real or generate 18.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Ab Global Real
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Ab Global Real |
Oil Gas and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Ab Global
The main advantage of trading using opposite Oil Gas and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector | Oil Gas vs. Fidelity Advisor Energy |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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