Correlation Between Ab Small and Federated Global
Can any of the company-specific risk be diversified away by investing in both Ab Small and Federated 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 Ab Small and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Federated Global Allocation, you can compare the effects of market volatilities on Ab Small and Federated 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 Ab Small with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Federated Global.
Diversification Opportunities for Ab Small and Federated Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAIX and Federated is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Ab Small 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 Ab Small Cap are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Ab Small i.e., Ab Small and Federated Global go up and down completely randomly.
Pair Corralation between Ab Small and Federated Global
Assuming the 90 days horizon Ab Small Cap is expected to generate 2.51 times more return on investment than Federated Global. However, Ab Small is 2.51 times more volatile than Federated Global Allocation. It trades about 0.17 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.26 per unit of risk. If you would invest 7,339 in Ab Small Cap on November 3, 2024 and sell it today you would earn a total of 335.00 from holding Ab Small Cap or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Federated Global Allocation
Performance |
| Timeline |
| Ab Small Cap |
| Federated Global All |
Ab Small and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Federated Global
The main advantage of trading using opposite Ab Small and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Federated 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 Federated Global will offset losses from the drop in Federated Global's long position.| Ab Small vs. Rationalpier 88 Convertible | Ab Small vs. Blrc Sgy Mnp | Ab Small vs. Dreyfusstandish Global Fixed | Ab Small vs. Ambrus Core Bond |
| Federated Global vs. Artisan High Income | Federated Global vs. Gmo Emerging Ntry | Federated Global vs. Rationalpier 88 Convertible | Federated Global vs. Massmutual Premier High |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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