Correlation Between IShares Core and AB Active
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core SP and AB Active ETFs,, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and AB Active.
Diversification Opportunities for IShares Core and AB Active
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and LRGC is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP 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 Core 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 Core SP 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 Core i.e., IShares Core and AB Active go up and down completely randomly.
Pair Corralation between IShares Core and AB Active
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.98 times more return on investment than AB Active. However, iShares Core SP is 1.02 times less risky than AB Active. It trades about 0.15 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.14 per unit of risk. If you would invest 58,203 in iShares Core SP on August 25, 2024 and sell it today you would earn a total of 1,642 from holding iShares Core SP or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. AB Active ETFs,
Performance |
| Timeline |
| iShares Core SP |
| AB Active ETFs, |
IShares Core and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and AB Active
The main advantage of trading using opposite IShares Core and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| AB Active vs. FT Vest Equity | AB Active vs. Northern Lights | AB Active vs. Dimensional International High | AB Active vs. First Trust Exchange Traded |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |