Correlation Between Ab Small and Ancorathelen Small

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Can any of the company-specific risk be diversified away by investing in both Ab Small and Ancorathelen 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 Ab Small and Ancorathelen Small 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 Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Ab Small and Ancorathelen 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 Ab Small with a short position of Ancorathelen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Ancorathelen Small.

Diversification Opportunities for Ab Small and Ancorathelen Small

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between SCYVX and Ancorathelen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancorathelen Small Mid 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 Ancorathelen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancorathelen Small Mid has no effect on the direction of Ab Small i.e., Ab Small and Ancorathelen Small go up and down completely randomly.

Pair Corralation between Ab Small and Ancorathelen Small

Assuming the 90 days horizon Ab Small Cap is expected to generate 1.04 times more return on investment than Ancorathelen Small. However, Ab Small is 1.04 times more volatile than Ancorathelen Small Mid Cap. It trades about 0.03 of its potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.01 per unit of risk. If you would invest  1,413  in Ab Small Cap on October 9, 2024 and sell it today you would earn a total of  79.00  from holding Ab Small Cap or generate 5.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.39%
ValuesDaily Returns

Ab Small Cap  vs.  Ancorathelen Small Mid Cap

 Performance 
       Timeline  
Ab Small Cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fairly strong basic indicators, Ab Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ancorathelen Small Mid 

Risk-Adjusted Performance

0 of 100

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

Ab Small and Ancorathelen Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ab Small and Ancorathelen Small

The main advantage of trading using opposite Ab Small and Ancorathelen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Ancorathelen 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 Ancorathelen Small will offset losses from the drop in Ancorathelen Small's long position.
The idea behind Ab Small Cap and Ancorathelen Small Mid 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.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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