Correlation Between Global Multi and Ab Select
Can any of the company-specific risk be diversified away by investing in both Global Multi and Ab Select 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 Global Multi and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Multi Strategy Fund and Ab Select Equity, you can compare the effects of market volatilities on Global Multi and Ab Select 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 Global Multi with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Multi and Ab Select.
Diversification Opportunities for Global Multi and Ab Select
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and AUUIX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Global Multi Strategy Fund and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity and Global Multi 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 Global Multi Strategy Fund are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Global Multi i.e., Global Multi and Ab Select go up and down completely randomly.
Pair Corralation between Global Multi and Ab Select
Assuming the 90 days horizon Global Multi is expected to generate 2.88 times less return on investment than Ab Select. But when comparing it to its historical volatility, Global Multi Strategy Fund is 3.06 times less risky than Ab Select. It trades about 0.13 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,549 in Ab Select Equity on September 12, 2024 and sell it today you would earn a total of 847.00 from holding Ab Select Equity or generate 54.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Multi Strategy Fund vs. Ab Select Equity
Performance |
| Timeline |
| Global Multi Strategy |
| Ab Select Equity |
Global Multi and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Multi and Ab Select
The main advantage of trading using opposite Global Multi and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Multi position performs unexpectedly, Ab Select 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 Select will offset losses from the drop in Ab Select's long position.| Global Multi vs. Global Advantage Portfolio | Global Multi vs. Global Strategist Portfolio | Global Multi vs. Global Strategist Portfolio | Global Multi vs. Global Equity Fund |
| Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard 500 Index | Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard Total Stock |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |