Correlation Between Pro-blend(r) Maximum and Ab Global
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Maximum 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 Pro-blend(r) Maximum and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Maximum Term and Ab Global Risk, you can compare the effects of market volatilities on Pro-blend(r) Maximum 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 Pro-blend(r) Maximum with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Maximum and Ab Global.
Diversification Opportunities for Pro-blend(r) Maximum and Ab Global
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pro-blend(r) and CBSYX is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Maximum Term and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk and Pro-blend(r) Maximum 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 Pro Blend Maximum Term 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 Risk has no effect on the direction of Pro-blend(r) Maximum i.e., Pro-blend(r) Maximum and Ab Global go up and down completely randomly.
Pair Corralation between Pro-blend(r) Maximum and Ab Global
Assuming the 90 days horizon Pro Blend Maximum Term is expected to generate 1.23 times more return on investment than Ab Global. However, Pro-blend(r) Maximum is 1.23 times more volatile than Ab Global Risk. It trades about 0.09 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.05 per unit of risk. If you would invest 2,103 in Pro Blend Maximum Term on September 4, 2024 and sell it today you would earn a total of 653.00 from holding Pro Blend Maximum Term or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Maximum Term vs. Ab Global Risk
Performance |
| Timeline |
| Pro-blend(r) Maximum |
| Ab Global Risk |
Pro-blend(r) Maximum and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Maximum and Ab Global
The main advantage of trading using opposite Pro-blend(r) Maximum and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Maximum 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.| Pro-blend(r) Maximum vs. Manning Napier Callodine | Pro-blend(r) Maximum vs. Manning Napier Callodine | Pro-blend(r) Maximum vs. Manning Napier Callodine | Pro-blend(r) Maximum vs. Pro Blend Extended Term |
| Ab Global vs. Towpath Technology | Ab Global vs. Allianzgi Technology Fund | Ab Global vs. Dreyfus Technology Growth | Ab Global vs. Mfs Technology Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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