Correlation Between Ab Small and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Ab Small and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Ab Small and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Floating Rate.
Diversification Opportunities for Ab Small and Floating Rate
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCYVX and Floating is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Ab Small i.e., Ab Small and Floating Rate go up and down completely randomly.
Pair Corralation between Ab Small and Floating Rate
Assuming the 90 days horizon Ab Small Cap is expected to generate 8.98 times more return on investment than Floating Rate. However, Ab Small is 8.98 times more volatile than Floating Rate Fund. It trades about 0.11 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.18 per unit of risk. If you would invest 1,379 in Ab Small Cap on September 5, 2024 and sell it today you would earn a total of 270.00 from holding Ab Small Cap or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Floating Rate Fund
Performance |
| Timeline |
| Ab Small Cap |
| Floating Rate |
Ab Small and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Floating Rate
The main advantage of trading using opposite Ab Small and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Ab Small vs. Ab Global E | Ab Small vs. Ab Global E | Ab Small vs. Ab Minnesota Portfolio | Ab Small vs. Ab Minnesota Portfolio |
| Floating Rate vs. Auer Growth Fund | Floating Rate vs. T Rowe Price | Floating Rate vs. Ab Value Fund | Floating Rate vs. Ab Small Cap |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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