Correlation Between Ab Global and Intal High

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

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

Diversification Opportunities for Ab Global and Intal High

0.79

Correlation Coefficient

Ab Global  Intal High

Poor diversification

The 3 months correlation between ANAGX and Intal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Intal High Relative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intal High Relative and Ab 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 Ab Global Bond are associated (or correlated) with Intal High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intal High Relative has no effect on the direction of Ab Global i.e., Ab Global and Intal High go up and down completely randomly.

Pair Corralation between Ab Global and Intal High

Assuming the 90 days horizon Ab Global is expected to generate 1.84 times less return on investment than Intal High. But when comparing it to its historical volatility, Ab Global Bond is 2.79 times less risky than Intal High. It trades about 0.04 of its potential returns per unit of risk. Intal High Relative is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Intal High Relative on October 4, 2024 and sell it today you would earn a total of  116.00  from holding Intal High Relative or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ab Global Bond  vs.  Intal High Relative

Ab Global Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intal High Relative

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intal High Relative has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ab Global and Intal High

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

The idea behind Ab Global Bond and Intal High Relative 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.