Correlation Between Ab Fixed-income and Multimedia Portfolio

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

By analyzing existing cross correlation between Ab Fixed Income Shares and Multimedia Portfolio Multimedia, you can compare the effects of market volatilities on Ab Fixed-income and Multimedia Portfolio 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 Fixed-income with a short position of Multimedia Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Fixed-income and Multimedia Portfolio.

Diversification Opportunities for Ab Fixed-income and Multimedia Portfolio

0.0

Correlation Coefficient

Ab Fixed-income  Multimedia Portfolio

Pay attention - limited upside

The 3 months correlation between AECXX and Multimedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ab Fixed Income Shares and Multimedia Portfolio Multimedi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimedia Portfolio and Ab Fixed-income 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 Fixed Income Shares are associated (or correlated) with Multimedia Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimedia Portfolio has no effect on the direction of Ab Fixed-income i.e., Ab Fixed-income and Multimedia Portfolio go up and down completely randomly.

Pair Corralation between Ab Fixed-income and Multimedia Portfolio

Assuming the 90 days horizon Ab Fixed Income Shares is expected to generate 33.68 times more return on investment than Multimedia Portfolio. However, Ab Fixed-income is 33.68 times more volatile than Multimedia Portfolio Multimedia. It trades about 0.07 of its potential returns per unit of risk. Multimedia Portfolio Multimedia is currently generating about 0.12 per unit of risk. If you would invest  443.00  in Ab Fixed Income Shares on October 5, 2024 and sell it today you would lose (343.00) from holding Ab Fixed Income Shares or give up 77.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	45.59%
Values	Daily Returns

Ab Fixed Income Shares  vs.  Multimedia Portfolio Multimedi

Ab Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Multimedia Portfolio

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multimedia Portfolio may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ab Fixed-income and Multimedia Portfolio

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

The idea behind Ab Fixed Income Shares and Multimedia Portfolio Multimedia 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.