Correlation Between Investec Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Investec Global and Ab 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 Investec Global and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Global Franchise and Ab Global Bond, you can compare the effects of market volatilities on Investec Global and Ab 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 Investec Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Global and Ab Global.
Diversification Opportunities for Investec Global and Ab Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investec and ANAZX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Investec Global Franchise and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond and Investec Global 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 Investec Global Franchise are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Investec Global i.e., Investec Global and Ab Global go up and down completely randomly.
Pair Corralation between Investec Global and Ab Global
Assuming the 90 days horizon Investec Global Franchise is expected to generate 2.29 times more return on investment than Ab Global. However, Investec Global is 2.29 times more volatile than Ab Global Bond. It trades about 0.05 of its potential returns per unit of risk. Ab Global Bond is currently generating about 0.03 per unit of risk. If you would invest 1,777 in Investec Global Franchise on October 23, 2024 and sell it today you would earn a total of 11.00 from holding Investec Global Franchise or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Investec Global Franchise vs. Ab Global Bond
Performance |
| Timeline |
| Investec Global Franchise |
| Ab Global Bond |
Investec Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Global and Ab Global
The main advantage of trading using opposite Investec Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Global position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab Global's long position.| Investec Global vs. Global Gold Fund | Investec Global vs. First Eagle Gold | Investec Global vs. International Investors Gold | Investec Global vs. Goldman Sachs Clean |
| Ab Global vs. Alphacentric Lifesci Healthcare | Ab Global vs. Allianzgi Health Sciences | Ab Global vs. Live Oak Health | Ab Global vs. Vanguard Health Care |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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