Correlation Between Ab Global and Rising Dollar

Can any of the company-specific risk be diversified away by investing in both Ab Global and Rising Dollar 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 Rising Dollar 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 Rising Dollar Profund, you can compare the effects of market volatilities on Ab Global and Rising Dollar 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 Rising Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Rising Dollar.

Diversification Opportunities for Ab Global and Rising Dollar

-0.8

Correlation Coefficient

Ab Global  Rising Dollar

Pay attention - limited upside

The 3 months correlation between CBSYX and Rising is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Rising Dollar Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Dollar Profund 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 Rising Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Dollar Profund has no effect on the direction of Ab Global i.e., Ab Global and Rising Dollar go up and down completely randomly.

Pair Corralation between Ab Global and Rising Dollar

Assuming the 90 days horizon Ab Global Risk is expected to under-perform the Rising Dollar. In addition to that, Ab Global is 3.96 times more volatile than Rising Dollar Profund. It trades about -0.12 of its total potential returns per unit of risk. Rising Dollar Profund is currently generating about 0.22 per unit of volatility. If you would invest  2,988  in Rising Dollar Profund on October 22, 2024 and sell it today you would earn a total of  174.00  from holding Rising Dollar Profund or generate 5.82% return on investment over 90 days.

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

Ab Global Risk  vs.  Rising Dollar Profund

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 unsteady performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Rising Dollar Profund

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rising Dollar Profund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Rising Dollar 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 Rising Dollar

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

The idea behind Ab Global Risk and Rising Dollar Profund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.