Correlation Between Ab Government and Jacob Micro

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

By analyzing existing cross correlation between Ab Government Exchange and Jacob Micro Cap, you can compare the effects of market volatilities on Ab Government and Jacob Micro 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 Government with a short position of Jacob Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Government and Jacob Micro.

Diversification Opportunities for Ab Government and Jacob Micro

0.0

Correlation Coefficient

Ab Government  Jacob Micro

Pay attention - limited upside

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

Pair Corralation between Ab Government and Jacob Micro

If you would invest  424.00  in Ab Government Exchange on October 25, 2024 and sell it today you would lose (324.00) from holding Ab Government Exchange or give up 76.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ab Government Exchange  vs.  Jacob Micro Cap

Ab Government Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jacob Micro Cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Micro Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jacob Micro showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ab Government and Jacob Micro

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

The idea behind Ab Government Exchange and Jacob Micro Cap 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.