Correlation Between Wellington Shields and Ab Small
Can any of the company-specific risk be diversified away by investing in both Wellington Shields and Ab Small 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 Wellington Shields and Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wellington Shields All Cap and Ab Small Cap, you can compare the effects of market volatilities on Wellington Shields and Ab Small 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 Wellington Shields with a short position of Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wellington Shields and Ab Small.
Diversification Opportunities for Wellington Shields and Ab Small
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wellington and SCYVX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wellington Shields All Cap and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap and Wellington Shields 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 Wellington Shields All Cap are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Wellington Shields i.e., Wellington Shields and Ab Small go up and down completely randomly.
Pair Corralation between Wellington Shields and Ab Small
Assuming the 90 days horizon Wellington Shields is expected to generate 1.02 times less return on investment than Ab Small. But when comparing it to its historical volatility, Wellington Shields All Cap is 1.61 times less risky than Ab Small. It trades about 0.26 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,441 in Ab Small Cap on September 12, 2024 and sell it today you would earn a total of 187.00 from holding Ab Small Cap or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Wellington Shields All Cap vs. Ab Small Cap
Performance |
| Timeline |
| Wellington Shields All |
| Ab Small Cap |
Wellington Shields and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wellington Shields and Ab Small
The main advantage of trading using opposite Wellington Shields and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wellington Shields position performs unexpectedly, Ab Small 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 Small will offset losses from the drop in Ab Small's long position.| Wellington Shields vs. Matson Money Equity | Wellington Shields vs. Cref Money Market | Wellington Shields vs. Hsbc Treasury Money | Wellington Shields vs. Prudential Government Money |
| Ab Small vs. American Century Etf | Ab Small vs. Valic Company I | Ab Small vs. Northern Small Cap | Ab Small vs. Small Cap Value 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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