Correlation Between Ab Global and Ab Concentrated
Can any of the company-specific risk be diversified away by investing in both Ab Global and Ab Concentrated 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 Ab Concentrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global E and Ab Centrated International, you can compare the effects of market volatilities on Ab Global and Ab Concentrated 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 Ab Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Ab Concentrated.
Diversification Opportunities for Ab Global and Ab Concentrated
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GCEAX and CIGYX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and Ab Centrated International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Centrated Interna 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 E are associated (or correlated) with Ab Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Centrated Interna has no effect on the direction of Ab Global i.e., Ab Global and Ab Concentrated go up and down completely randomly.
Pair Corralation between Ab Global and Ab Concentrated
Assuming the 90 days horizon Ab Global E is expected to generate 0.8 times more return on investment than Ab Concentrated. However, Ab Global E is 1.25 times less risky than Ab Concentrated. It trades about 0.08 of its potential returns per unit of risk. Ab Centrated International is currently generating about 0.01 per unit of risk. If you would invest 1,354 in Ab Global E on September 3, 2024 and sell it today you would earn a total of 434.00 from holding Ab Global E or generate 32.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. Ab Centrated International
Performance |
| Timeline |
| Ab Global E |
| Ab Centrated Interna |
Ab Global and Ab Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Ab Concentrated
The main advantage of trading using opposite Ab Global and Ab Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Ab Concentrated 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 Concentrated will offset losses from the drop in Ab Concentrated's long position.| Ab Global vs. Jhancock Diversified Macro | Ab Global vs. Delaware Limited Term Diversified | Ab Global vs. Huber Capital Diversified | Ab Global vs. Oppenheimer International Diversified |
| Ab Concentrated vs. Ab Global E | Ab Concentrated vs. Ab Centrated Growth | Ab Concentrated vs. Ab Discovery Growth | Ab Concentrated vs. Ab 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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