Correlation Between All Asset and Ab Global
Can any of the company-specific risk be diversified away by investing in both All Asset 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 All Asset and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Asset Fund and Ab Global Risk, you can compare the effects of market volatilities on All Asset 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 All Asset with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Asset and Ab Global.
Diversification Opportunities for All Asset and Ab Global
Very poor diversification
The 3 months correlation between All and CBSYX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding All Asset Fund 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 All Asset 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 All Asset Fund 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 All Asset i.e., All Asset and Ab Global go up and down completely randomly.
Pair Corralation between All Asset and Ab Global
Assuming the 90 days horizon All Asset is expected to generate 1.54 times less return on investment than Ab Global. But when comparing it to its historical volatility, All Asset Fund is 1.38 times less risky than Ab Global. It trades about 0.11 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,683 in Ab Global Risk on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Ab Global Risk or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Asset Fund vs. Ab Global Risk
Performance |
| Timeline |
| All Asset Fund |
| Ab Global Risk |
All Asset and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Asset and Ab Global
The main advantage of trading using opposite All Asset and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Asset 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.| All Asset vs. Ab Bond Inflation | All Asset vs. Oklahoma Municipal Fund | All Asset vs. Multisector Bond Sma | All Asset vs. Ab Impact Municipal |
| Ab Global vs. Ab Global Risk | Ab Global vs. Alliancebernstein Global High | Ab Global vs. Legg Mason Partners | Ab Global vs. Franklin High Income |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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