Correlation Between Ab Global and Money Market

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

By analyzing existing cross correlation between Ab Global Risk and Money Market Obligations, you can compare the effects of market volatilities on Ab Global and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Money Market.

Diversification Opportunities for Ab Global and Money Market

0.08

Correlation Coefficient

Ab Global  Money Market

Significant diversification

The 3 months correlation between CABIX and Money is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Risk are associated (or correlated) with Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of Ab Global i.e., Ab Global and Money Market go up and down completely randomly.

Pair Corralation between Ab Global and Money Market

Assuming the 90 days horizon Ab Global is expected to generate 28871.0 times less return on investment than Money Market. But when comparing it to its historical volatility, Ab Global Risk is 62.71 times less risky than Money Market. It trades about 0.0 of its potential returns per unit of risk. Money Market Obligations is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  378.00  in Money Market Obligations on September 19, 2024 and sell it today you would lose (278.00) from holding Money Market Obligations or give up 73.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.82%
Values	Daily Returns

Ab Global Risk  vs.  Money Market Obligations

Ab Global Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Money Market Obligations

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ab Global and Money Market

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

The idea behind Ab Global Risk and Money Market Obligations 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.