Correlation Between Ab Intermediate and Ambrus Core

Can any of the company-specific risk be diversified away by investing in both Ab Intermediate and Ambrus Core 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 Intermediate and Ambrus Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Intermediate Bond and Ambrus Core Bond, you can compare the effects of market volatilities on Ab Intermediate and Ambrus Core 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 Intermediate with a short position of Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Intermediate and Ambrus Core.

Diversification Opportunities for Ab Intermediate and Ambrus Core

-0.42

Correlation Coefficient

Ab Intermediate  Ambrus Core

Very good diversification

The 3 months correlation between ABQZX and Ambrus is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ab Intermediate Bond and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond and Ab Intermediate 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 Intermediate Bond are associated (or correlated) with Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Ab Intermediate i.e., Ab Intermediate and Ambrus Core go up and down completely randomly.

Pair Corralation between Ab Intermediate and Ambrus Core

Assuming the 90 days horizon Ab Intermediate Bond is expected to under-perform the Ambrus Core. In addition to that, Ab Intermediate is 1.26 times more volatile than Ambrus Core Bond. It trades about -0.23 of its total potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.21 per unit of volatility. If you would invest  976.00  in Ambrus Core Bond on December 21, 2024 and sell it today you would earn a total of  22.00  from holding Ambrus Core Bond or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.73%
Values	Daily Returns

Ab Intermediate Bond  vs.  Ambrus Core Bond

Ab Intermediate Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ab Intermediate Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ambrus Core Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ambrus Core Bond are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Ambrus Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Intermediate and Ambrus Core

The main advantage of trading using opposite Ab Intermediate and Ambrus Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Intermediate position performs unexpectedly, Ambrus Core 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 Ambrus Core will offset losses from the drop in Ambrus Core's long position.

The idea behind Ab Intermediate Bond and Ambrus Core Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.