Correlation Between Ab Select and American Mutual
Can any of the company-specific risk be diversified away by investing in both Ab Select and American Mutual 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 Select and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and American Mutual Fund, you can compare the effects of market volatilities on Ab Select and American Mutual 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 Select with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and American Mutual.
Diversification Opportunities for Ab Select and American Mutual
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUUIX and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Ab Select 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 Select Equity are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Ab Select i.e., Ab Select and American Mutual go up and down completely randomly.
Pair Corralation between Ab Select and American Mutual
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.22 times more return on investment than American Mutual. However, Ab Select is 1.22 times more volatile than American Mutual Fund. It trades about 0.09 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.06 per unit of risk. If you would invest 1,560 in Ab Select Equity on September 25, 2024 and sell it today you would earn a total of 624.00 from holding Ab Select Equity or generate 40.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Select Equity vs. American Mutual Fund
Performance |
Timeline |
Ab Select Equity |
American Mutual |
Ab Select and American Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Select and American Mutual
The main advantage of trading using opposite Ab Select and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.Ab Select vs. Edward Jones Money | Ab Select vs. Elfun Government Money | Ab Select vs. Ab Government Exchange | Ab Select vs. The Gabelli Money |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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