Correlation Between Small Cap and Ab Select
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Core and Ab Select Equity, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Ab Select.
Diversification Opportunities for Small Cap and Ab Select
Almost no diversification
The 3 months correlation between Small and AUUCX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Core 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 Small Cap 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 Small Cap Core 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 Small Cap i.e., Small Cap and Ab Select go up and down completely randomly.
Pair Corralation between Small Cap and Ab Select
Assuming the 90 days horizon Small Cap Core is expected to generate 2.36 times more return on investment than Ab Select. However, Small Cap is 2.36 times more volatile than Ab Select Equity. It trades about 0.27 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.33 per unit of risk. If you would invest 1,361 in Small Cap Core on September 1, 2024 and sell it today you would earn a total of 132.00 from holding Small Cap Core or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Core vs. Ab Select Equity
Performance |
| Timeline |
| Small Cap Core |
| Ab Select Equity |
Small Cap and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Ab Select
The main advantage of trading using opposite Small Cap and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Pnc Emerging Markets | Small Cap vs. Black Oak Emerging | Small Cap vs. Ashmore Emerging Markets | Small Cap vs. Artisan Emerging Markets |
| Ab Select vs. Ab E Opportunities | Ab Select vs. Select Fund C | Ab Select vs. Select Fund R | Ab Select vs. Amg Renaissance Large |
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.
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