Correlation Between Mirova Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Mirova Global and Ab Global 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 Mirova Global and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirova Global Green and Ab Global Real, you can compare the effects of market volatilities on Mirova Global and Ab Global 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 Mirova Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirova Global and Ab Global.
Diversification Opportunities for Mirova Global and Ab Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirova and AEEIX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mirova Global Green and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Mirova Global 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 Mirova Global Green are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Mirova Global i.e., Mirova Global and Ab Global go up and down completely randomly.
Pair Corralation between Mirova Global and Ab Global
Assuming the 90 days horizon Mirova Global is expected to generate 3.06 times less return on investment than Ab Global. But when comparing it to its historical volatility, Mirova Global Green is 3.09 times less risky than Ab Global. It trades about 0.13 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,336 in Ab Global Real on August 24, 2024 and sell it today you would earn a total of 178.00 from holding Ab Global Real or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirova Global Green vs. Ab Global Real
Performance |
| Timeline |
| Mirova Global Green |
| Ab Global Real |
Mirova Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirova Global and Ab Global
The main advantage of trading using opposite Mirova Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirova Global position performs unexpectedly, Ab Global 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 Global will offset losses from the drop in Ab Global's long position.| Mirova Global vs. Davis Financial Fund | Mirova Global vs. Gabelli Global Financial | Mirova Global vs. Icon Financial Fund | Mirova Global vs. Prudential Jennison Financial |
| Ab Global vs. Franklin Government Money | Ab Global vs. Hewitt Money Market | Ab Global vs. Edward Jones Money | Ab Global vs. Prudential Government Money |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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