Correlation Between IShares Russell and AB Active
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell 1000 and AB Active ETFs,, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and AB Active.
Diversification Opportunities for IShares Russell 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 Russell 1000 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 Russell 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 Russell 1000 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 Russell i.e., IShares Russell and AB Active go up and down completely randomly.
Pair Corralation between IShares Russell and AB Active
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 1.0 times more return on investment than AB Active. However, IShares Russell is 1.0 times more volatile than AB Active ETFs,. It trades about 0.22 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.18 per unit of risk. If you would invest 31,853 in iShares Russell 1000 on August 29, 2024 and sell it today you would earn a total of 1,316 from holding iShares Russell 1000 or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. AB Active ETFs,
Performance |
| Timeline |
| iShares Russell 1000 |
| AB Active ETFs, |
IShares Russell and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and AB Active
The main advantage of trading using opposite IShares Russell and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. Morningstar Unconstrained Allocation | IShares Russell vs. High Yield Municipal Fund | IShares Russell vs. Via Renewables | IShares Russell vs. Knife River |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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