Correlation Between City National and Ab Global
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Ab Global Real, you can compare the effects of market volatilities on City National 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 City National with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Ab Global.
Diversification Opportunities for City National and Ab Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between City and AREAX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale 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 City National 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 City National Rochdale 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 City National i.e., City National and Ab Global go up and down completely randomly.
Pair Corralation between City National and Ab Global
Assuming the 90 days horizon City National Rochdale is expected to generate 0.08 times more return on investment than Ab Global. However, City National Rochdale is 12.69 times less risky than Ab Global. It trades about 0.47 of its potential returns per unit of risk. Ab Global Real is currently generating about -0.03 per unit of risk. If you would invest 1,936 in City National Rochdale on December 4, 2024 and sell it today you would earn a total of 39.00 from holding City National Rochdale or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
City National Rochdale vs. Ab Global Real
Performance |
Timeline |
City National Rochdale |
Ab Global Real |
City National and Ab Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with City National and Ab Global
The main advantage of trading using opposite City National and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.City National vs. Profunds Large Cap Growth | City National vs. Multimanager Lifestyle Growth | City National vs. Crafword Dividend Growth | City National vs. Oklahoma College Savings |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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