Correlation Between Ab Global and International Small
Can any of the company-specific risk be diversified away by investing in both Ab Global and International Small 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 International Small 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 International Small Cap, you can compare the effects of market volatilities on Ab Global and International Small 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 International Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and International Small.
Diversification Opportunities for Ab Global and International Small
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GCECX and International is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and International Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Small Cap 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 International Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Small Cap has no effect on the direction of Ab Global i.e., Ab Global and International Small go up and down completely randomly.
Pair Corralation between Ab Global and International Small
Assuming the 90 days horizon Ab Global E is expected to generate 1.04 times more return on investment than International Small. However, Ab Global is 1.04 times more volatile than International Small Cap. It trades about 0.02 of its potential returns per unit of risk. International Small Cap is currently generating about -0.13 per unit of risk. If you would invest 1,720 in Ab Global E on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Ab Global E or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. International Small Cap
Performance |
| Timeline |
| Ab Global E |
| International Small Cap |
Ab Global and International Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and International Small
The main advantage of trading using opposite Ab Global and International Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, International Small 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 International Small will offset losses from the drop in International Small's long position.| Ab Global vs. John Hancock Government | Ab Global vs. Dws Government Money | Ab Global vs. Us Government Securities | Ab Global vs. Franklin Government Money |
| International Small vs. Ab Small Cap | International Small vs. Artisan Small Cap | International Small vs. Small Midcap Dividend Income | International Small vs. Kinetics 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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