Correlation Between Strategic Equity and Ab Global

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

By analyzing existing cross correlation between Strategic Equity Portfolio and Ab Global Real, you can compare the effects of market volatilities on Strategic Equity and Ab Global 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 Strategic Equity with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Equity and Ab Global.

Diversification Opportunities for Strategic Equity and Ab Global

0.35

Correlation Coefficient

Strategic Equity  Ab Global

Weak diversification

The 3 months correlation between Strategic and ARSYX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Equity Portfolio and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Strategic Equity 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 Strategic Equity Portfolio are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Strategic Equity i.e., Strategic Equity and Ab Global go up and down completely randomly.

Pair Corralation between Strategic Equity and Ab Global

Assuming the 90 days horizon Strategic Equity Portfolio is expected to under-perform the Ab Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Strategic Equity Portfolio is 1.04 times less risky than Ab Global. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Ab Global Real is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,409  in Ab Global Real on December 22, 2024 and sell it today you would earn a total of  11.00  from holding Ab Global Real or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Strategic Equity Portfolio  vs.  Ab Global Real

Strategic Equity Por

Risk-Adjusted Performance

Very Weak

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

Ab Global Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global Real are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strategic Equity and Ab Global

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

The idea behind Strategic Equity Portfolio and Ab Global Real 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.