Correlation Between Ab Small and Lifex Inflation

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

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

Diversification Opportunities for Ab Small and Lifex Inflation

-0.67

Correlation Coefficient

Ab Small  Lifex Inflation

Excellent diversification

The 3 months correlation between QUAIX and Lifex is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot and Ab Small 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 Small Cap are associated (or correlated) with Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of Ab Small i.e., Ab Small and Lifex Inflation go up and down completely randomly.

Pair Corralation between Ab Small and Lifex Inflation

If you would invest  7,412  in Ab Small Cap on September 16, 2024 and sell it today you would earn a total of  275.00  from holding Ab Small Cap or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	9.52%
Values	Daily Returns

Ab Small Cap  vs.  Lifex Inflation Protected Inco

Ab Small Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Small Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ab Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lifex Inflation Prot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lifex Inflation Protected Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary 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 Ab Small and Lifex Inflation

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

The idea behind Ab Small Cap and Lifex Inflation Protected Income 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.