Correlation Between AB High and Global X

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Can any of the company-specific risk be diversified away by investing in both AB High and Global X 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 High and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB High Dividend and Global X Funds, you can compare the effects of market volatilities on AB High and Global X 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 High with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB High and Global X.

Diversification Opportunities for AB High and Global X

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between HIDV and Global is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AB High Dividend and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and AB High 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 High Dividend are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of AB High i.e., AB High and Global X go up and down completely randomly.

Pair Corralation between AB High and Global X

Given the investment horizon of 90 days AB High Dividend is expected to generate 0.54 times more return on investment than Global X. However, AB High Dividend is 1.84 times less risky than Global X. It trades about 0.18 of its potential returns per unit of risk. Global X Funds is currently generating about 0.0 per unit of risk. If you would invest  7,365  in AB High Dividend on September 12, 2024 and sell it today you would earn a total of  108.00  from holding AB High Dividend or generate 1.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

AB High Dividend  vs.  Global X Funds

 Performance 
       Timeline  
AB High Dividend 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in AB High Dividend are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, AB High may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Global X Funds 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AB High and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AB High and Global X

The main advantage of trading using opposite AB High and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB High position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind AB High Dividend and Global X Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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