Correlation Between Ab Select and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Ab Select and Huber Capital 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 Huber Capital 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 Huber Capital Equity, you can compare the effects of market volatilities on Ab Select and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Huber Capital.
Diversification Opportunities for Ab Select and Huber Capital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUUIX and Huber is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Huber Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Equity 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Equity has no effect on the direction of Ab Select i.e., Ab Select and Huber Capital go up and down completely randomly.
Pair Corralation between Ab Select and Huber Capital
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.1 times more return on investment than Huber Capital. However, Ab Select is 1.1 times more volatile than Huber Capital Equity. It trades about 0.12 of its potential returns per unit of risk. Huber Capital Equity is currently generating about 0.08 per unit of risk. If you would invest 2,157 in Ab Select Equity on December 2, 2024 and sell it today you would earn a total of 78.00 from holding Ab Select Equity or generate 3.62% 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. Huber Capital Equity
Performance |
Timeline |
Ab Select Equity |
Huber Capital Equity |
Ab Select and Huber Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Select and Huber Capital
The main advantage of trading using opposite Ab Select and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.Ab Select vs. World Precious Minerals | Ab Select vs. Investment Managers Series | Ab Select vs. The Gold Bullion | Ab Select vs. International Investors Gold |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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