Correlation Between NYSE Composite and Ab Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ab Growth 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 NYSE Composite and Ab Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ab Growth Fund, you can compare the effects of market volatilities on NYSE Composite and Ab Growth 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 NYSE Composite with a short position of Ab Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ab Growth.
Diversification Opportunities for NYSE Composite and Ab Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and AGRCX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ab Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Growth Fund and NYSE Composite 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 NYSE Composite are associated (or correlated) with Ab Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Growth Fund has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ab Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Ab Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.45 times less return on investment than Ab Growth. But when comparing it to its historical volatility, NYSE Composite is 1.77 times less risky than Ab Growth. It trades about 0.42 of its potential returns per unit of risk. Ab Growth Fund is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,060 in Ab Growth Fund on September 1, 2024 and sell it today you would earn a total of 239.00 from holding Ab Growth Fund or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Ab Growth Fund
Performance |
| Timeline |
NYSE Composite and Ab Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ab Growth Fund
Pair trading matchups for Ab Growth
Pair Trading with NYSE Composite and Ab Growth
The main advantage of trading using opposite NYSE Composite and Ab Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ab Growth 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 Growth will offset losses from the drop in Ab Growth's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Ab Growth vs. Ab Sustainable Global | Ab Growth vs. Ab Relative Value | Ab Growth vs. Ab Growth Fund | Ab Growth vs. Ab Small Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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