Correlation Between Ab Small and Jacob Micro
Can any of the company-specific risk be diversified away by investing in both Ab Small and Jacob Micro 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 Jacob Micro 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 Jacob Micro Cap, you can compare the effects of market volatilities on Ab Small and Jacob Micro 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 Jacob Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Jacob Micro.
Diversification Opportunities for Ab Small and Jacob Micro
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAIX and Jacob is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Jacob Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Micro Cap 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 Jacob Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Micro Cap has no effect on the direction of Ab Small i.e., Ab Small and Jacob Micro go up and down completely randomly.
Pair Corralation between Ab Small and Jacob Micro
Assuming the 90 days horizon Ab Small Cap is expected to generate 0.94 times more return on investment than Jacob Micro. However, Ab Small Cap is 1.07 times less risky than Jacob Micro. It trades about 0.08 of its potential returns per unit of risk. Jacob Micro Cap is currently generating about 0.07 per unit of risk. If you would invest 6,001 in Ab Small Cap on September 12, 2024 and sell it today you would earn a total of 1,748 from holding Ab Small Cap or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ab Small Cap vs. Jacob Micro Cap
Performance |
| Timeline |
| Ab Small Cap |
| Jacob Micro Cap |
Ab Small and Jacob Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Jacob Micro
The main advantage of trading using opposite Ab Small and Jacob Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Jacob Micro 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 Jacob Micro will offset losses from the drop in Jacob Micro's long position.| Ab Small vs. Prudential Jennison International | Ab Small vs. Fidelity New Markets | Ab Small vs. Ohio Variable College |
| Jacob Micro vs. Sp Smallcap 600 | Jacob Micro vs. Ab Small Cap | Jacob Micro vs. Cardinal Small Cap | Jacob Micro vs. Smallcap Growth 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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