Correlation Between Ab Global and Ab New
Can any of the company-specific risk be diversified away by investing in both Ab Global and Ab New 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 New 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 New Jersey, you can compare the effects of market volatilities on Ab Global and Ab New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Ab New.
Diversification Opportunities for Ab Global and Ab New
Significant diversification
The 3 months correlation between GCECX and ANJAX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and Ab New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab New Jersey 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab New Jersey has no effect on the direction of Ab Global i.e., Ab Global and Ab New go up and down completely randomly.
Pair Corralation between Ab Global and Ab New
Assuming the 90 days horizon Ab Global E is expected to generate 3.38 times more return on investment than Ab New. However, Ab Global is 3.38 times more volatile than Ab New Jersey. It trades about 0.1 of its potential returns per unit of risk. Ab New Jersey is currently generating about 0.1 per unit of risk. If you would invest 1,473 in Ab Global E on September 4, 2024 and sell it today you would earn a total of 265.00 from holding Ab Global E or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. Ab New Jersey
Performance |
| Timeline |
| Ab Global E |
| Ab New Jersey |
Ab Global and Ab New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Ab New
The main advantage of trading using opposite Ab Global and Ab New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Ab New 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 New will offset losses from the drop in Ab New's long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab Minnesota Portfolio |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |