Correlation Between IShares Currency and AB Active
Can any of the company-specific risk be diversified away by investing in both IShares Currency and AB Active 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 IShares Currency and AB Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Currency Hedged and AB Active ETFs,, you can compare the effects of market volatilities on IShares Currency and AB Active 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 IShares Currency with a short position of AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Currency and AB Active.
Diversification Opportunities for IShares Currency and AB Active
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and ILOW is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Currency Hedged and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, and IShares Currency 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 iShares Currency Hedged are associated (or correlated) with AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of IShares Currency i.e., IShares Currency and AB Active go up and down completely randomly.
Pair Corralation between IShares Currency and AB Active
Given the investment horizon of 90 days iShares Currency Hedged is expected to generate 0.92 times more return on investment than AB Active. However, iShares Currency Hedged is 1.08 times less risky than AB Active. It trades about 0.08 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.01 per unit of risk. If you would invest 2,861 in iShares Currency Hedged on September 14, 2024 and sell it today you would earn a total of 412.00 from holding iShares Currency Hedged or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.95% |
| Values | Daily Returns |
iShares Currency Hedged vs. AB Active ETFs,
Performance |
| Timeline |
| iShares Currency Hedged |
| AB Active ETFs, |
IShares Currency and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Currency and AB Active
The main advantage of trading using opposite IShares Currency and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Currency position performs unexpectedly, AB Active 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 Active will offset losses from the drop in AB Active's long position.| IShares Currency vs. iShares Currency Hedged | IShares Currency vs. iShares MSCI Intl | IShares Currency vs. iShares Currency Hedged |
| AB Active vs. iShares MSCI Intl | AB Active vs. iShares MSCI Intl | AB Active vs. iShares Currency Hedged | AB Active vs. iShares Edge MSCI |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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