Correlation Between Ab Global and Ab Sustainable
Can any of the company-specific risk be diversified away by investing in both Ab Global and Ab Sustainable 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 Sustainable 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 Sustainable Thematic, you can compare the effects of market volatilities on Ab Global and Ab Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Ab Sustainable.
Diversification Opportunities for Ab Global and Ab Sustainable
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GCECX and SUTZX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Ab Global i.e., Ab Global and Ab Sustainable go up and down completely randomly.
Pair Corralation between Ab Global and Ab Sustainable
Assuming the 90 days horizon Ab Global is expected to generate 1.2 times less return on investment than Ab Sustainable. But when comparing it to its historical volatility, Ab Global E is 1.16 times less risky than Ab Sustainable. It trades about 0.1 of its potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,681 in Ab Sustainable Thematic on September 2, 2024 and sell it today you would earn a total of 377.00 from holding Ab Sustainable Thematic or generate 22.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. Ab Sustainable Thematic
Performance |
| Timeline |
| Ab Global E |
| Ab Sustainable Thematic |
Ab Global and Ab Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Ab Sustainable
The main advantage of trading using opposite Ab Global and Ab Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Ab Sustainable 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 Sustainable will offset losses from the drop in Ab Sustainable's long position.| Ab Global vs. Ft 7934 Corporate | Ab Global vs. T Rowe Price | Ab Global vs. Thrivent Income Fund | Ab Global vs. California Bond Fund |
| Ab Sustainable vs. Shelton Emerging Markets | Ab Sustainable vs. Growth Strategy Fund | Ab Sustainable vs. Doubleline Emerging Markets | Ab Sustainable vs. Ashmore Emerging Markets |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |