Correlation Between Abbey Capital and Pro-blend(r) Moderate
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Pro-blend(r) Moderate 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 Abbey Capital and Pro-blend(r) Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbey Capital Multi and Pro Blend Moderate Term, you can compare the effects of market volatilities on Abbey Capital and Pro-blend(r) Moderate 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 Abbey Capital with a short position of Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Pro-blend(r) Moderate.
Diversification Opportunities for Abbey Capital and Pro-blend(r) Moderate
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Abbey and Pro-blend(r) is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Multi and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate and Abbey Capital 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 Abbey Capital Multi are associated (or correlated) with Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of Abbey Capital i.e., Abbey Capital and Pro-blend(r) Moderate go up and down completely randomly.
Pair Corralation between Abbey Capital and Pro-blend(r) Moderate
Assuming the 90 days horizon Abbey Capital Multi is expected to generate 2.03 times more return on investment than Pro-blend(r) Moderate. However, Abbey Capital is 2.03 times more volatile than Pro Blend Moderate Term. It trades about 0.22 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.23 per unit of risk. If you would invest 1,149 in Abbey Capital Multi on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Abbey Capital Multi or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Multi vs. Pro Blend Moderate Term
Performance |
| Timeline |
| Abbey Capital Multi |
| Pro-blend(r) Moderate |
Abbey Capital and Pro-blend(r) Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Pro-blend(r) Moderate
The main advantage of trading using opposite Abbey Capital and Pro-blend(r) Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Pro-blend(r) Moderate 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 Pro-blend(r) Moderate will offset losses from the drop in Pro-blend(r) Moderate's long position.| Abbey Capital vs. Abbey Capital Futures | Abbey Capital vs. Abbey Capital Futures | Abbey Capital vs. Abbey Capital Futures |
| Pro-blend(r) Moderate vs. Pro Blend Servative Term | Pro-blend(r) Moderate vs. Pro Blend Extended Term | Pro-blend(r) Moderate vs. Pro Blend Maximum Term | Pro-blend(r) Moderate vs. Greenspring Fund Retail |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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