Correlation Between Ab Global and Ab Select
Can any of the company-specific risk be diversified away by investing in both Ab Global and Ab Select 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 Select 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 Select Equity, you can compare the effects of market volatilities on Ab Global and Ab Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Ab Select.
Diversification Opportunities for Ab Global and Ab Select
Very weak diversification
The 3 months correlation between GCEYX and AUUCX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Ab Global i.e., Ab Global and Ab Select go up and down completely randomly.
Pair Corralation between Ab Global and Ab Select
Assuming the 90 days horizon Ab Global is expected to generate 2.35 times less return on investment than Ab Select. But when comparing it to its historical volatility, Ab Global E is 1.13 times less risky than Ab Select. It trades about 0.16 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,020 in Ab Select Equity on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Ab Select Equity or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Global E vs. Ab Select Equity
Performance |
| Timeline |
| Ab Global E |
| Ab Select Equity |
Ab Global and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Ab Select
The main advantage of trading using opposite Ab Global and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Ab Select 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 Select will offset losses from the drop in Ab Select's long position.| Ab Global vs. Commonwealth Global Fund | Ab Global vs. Growth Opportunities Fund | Ab Global vs. Small Cap Stock | Ab Global vs. Nasdaq 100 Index Fund |
| Ab Select vs. Ab E Opportunities | Ab Select vs. Select Fund C | Ab Select vs. Select Fund R | Ab Select vs. Amg Renaissance Large |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |