Correlation Between Power Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Power Global and Ab Global 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 Power Global and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Global Tactical and Ab Global Risk, you can compare the effects of market volatilities on Power Global and Ab Global 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 Power Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Global and Ab Global.
Diversification Opportunities for Power Global and Ab Global
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Power and CABIX is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Power Global Tactical and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk and Power 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 Power Global Tactical are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Power Global i.e., Power Global and Ab Global go up and down completely randomly.
Pair Corralation between Power Global and Ab Global
Assuming the 90 days horizon Power Global is expected to generate 3.48 times less return on investment than Ab Global. But when comparing it to its historical volatility, Power Global Tactical is 1.05 times less risky than Ab Global. It trades about 0.05 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,531 in Ab Global Risk on November 27, 2024 and sell it today you would earn a total of 20.00 from holding Ab Global Risk or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Global Tactical vs. Ab Global Risk
Performance |
| Timeline |
| Power Global Tactical |
| Ab Global Risk |
Power Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Global and Ab Global
The main advantage of trading using opposite Power Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Global position performs unexpectedly, Ab Global 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 Global will offset losses from the drop in Ab Global's long position.| Power Global vs. John Hancock Government | Power Global vs. Bbh Intermediate Municipal | Power Global vs. Ab Municipal Bond | Power Global vs. Us Government Securities |
| Ab Global vs. Dunham High Yield | Ab Global vs. Artisan High Income | Ab Global vs. Voya High Yield | Ab Global vs. Pace High Yield |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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