Correlation Between Ab Global and Emerald Insights
Can any of the company-specific risk be diversified away by investing in both Ab Global and Emerald Insights 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 Emerald Insights 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 Emerald Insights Fund, you can compare the effects of market volatilities on Ab Global and Emerald Insights 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 Emerald Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Emerald Insights.
Diversification Opportunities for Ab Global and Emerald Insights
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANAGX and EMERALD is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Emerald Insights Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Insights 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 Emerald Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Insights has no effect on the direction of Ab Global i.e., Ab Global and Emerald Insights go up and down completely randomly.
Pair Corralation between Ab Global and Emerald Insights
Assuming the 90 days horizon Ab Global is expected to generate 5.65 times less return on investment than Emerald Insights. But when comparing it to its historical volatility, Ab Global Bond is 4.04 times less risky than Emerald Insights. It trades about 0.06 of its potential returns per unit of risk. Emerald Insights Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,297 in Emerald Insights Fund on December 4, 2024 and sell it today you would earn a total of 670.00 from holding Emerald Insights Fund or generate 51.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Global Bond vs. Emerald Insights Fund
Performance |
Timeline |
Ab Global Bond |
Emerald Insights |
Ab Global and Emerald Insights Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Global and Emerald Insights
The main advantage of trading using opposite Ab Global and Emerald Insights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Emerald Insights 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 Emerald Insights will offset losses from the drop in Emerald Insights' long position.Ab Global vs. John Hancock Variable | Ab Global vs. Fidelity Large Cap | Ab Global vs. Jpmorgan Large Cap | Ab Global vs. Dunham Large Cap |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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