Correlation Between Great Lakes and Ab Small

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

By analyzing existing cross correlation between Great Lakes Disciplined and Ab Small Cap, you can compare the effects of market volatilities on Great Lakes and Ab Small 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 Great Lakes with a short position of Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and Ab Small.

Diversification Opportunities for Great Lakes and Ab Small

0.0

Correlation Coefficient

Great Lakes  Ab Small

Pay attention - limited upside

The 3 months correlation between Great and SCYVX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Disciplined and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap and Great Lakes 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 Great Lakes Disciplined are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Great Lakes i.e., Great Lakes and Ab Small go up and down completely randomly.

Pair Corralation between Great Lakes and Ab Small

If you would invest (100.00) in Great Lakes Disciplined on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Great Lakes Disciplined or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Great Lakes Disciplined  vs.  Ab Small Cap

Great Lakes Disciplined

Risk-Adjusted Performance

Very Weak

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

Ab Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ab Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Great Lakes and Ab Small

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

The idea behind Great Lakes Disciplined and Ab Small Cap 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.